What happened

Shares of T-Mobile US (NASDAQ:TMUS) gained 10.4% in 2017, according to data from S&P Global Market Intelligence. Investors in the third-largest wireless provider in North America fell short of larger gains in the stock market overall, as the S&P 500 returned 19.4% over the same period. A failed attempt to merge with fourth-place network Sprint (NYSE:S) was the core culprit behind this disappointing performance.

Rising stock chart superimposed over digital map of the world

Image source: Getty Images.

So what

In the first half of 2017, reports of a merger between Sprint and T-Mobile ran rampant. Going beyond mere rumors, management of both companies confirmed that they were having serious talks about a business combination. T-Mobile's stock rose on this wave; Sprint shares stayed as volatile and unpredictable as usual.

Then the merger idea fell apart. New reports said that Sprint was looking at better buyout offers from the cable industry. Regulatory approval of a T-Mobile-Sprint buyout started to sound like a coin flip. Above all else, clashing larger-than-life personalities on both sides made it impossible to structure a fair deal with a clear post-merger leadership team.

So the two went their separate ways. Both stocks plunged on the news that Sprint and T-Mobile would stay apart, though Sprint investors suffered a much harder hit, experiencing a 30% loss by the end of the year.

TMUS Chart

TMUS data by YCharts.

Now what

Throughout all this drama, T-Mobile continued to steal mobile subscribers from its rivals and exceed Wall Street's earnings targets. The company would still prefer to team up with a spectrum-rich partner similar to Sprint in order to build economies of scale, and a merger like that would also help T-Mobile fill gaps in its wireless coverage maps. Moreover, the Un-carrier's consumer-friendly promotions and pricing policies are burning cash while attracting millions of new customers.

Still, the stock roared into 2017 and has now cooled down to a more reasonable valuation. T-Mobile looks like a sensible investment today, but not necessarily a screaming buy.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.