U.S. Cellular declined $3.96 per share, or 10%, to $35.06. Parent Telephone and Data Systems Inc. dropped $4.09, or more than 15%, to $22.12.

Details from U.S. Cellular's earnings report could contribute to the losses. The company had disappointing wireless margins.

Sprint is picking up Chicago, St. Louis and other Midwestern markets. The Overland Park, Kan., buyer would gain 585,000 customers and spectrum that can be used to build out its high-speed long-term evolution, or LTE, wireless network.

U.S. Cellular portrayed the sale as a disposal of unprofitable operations that would allow it to focus on stronger markets.

"Our path to LTE would have been very expensive," CFO Steven Campbell said of the markets during a Wednesday call about the transaction and third-quarter earnings. U.S. Cellular valued the sale of $820 per customer or $1.74 per megahertz per person covered.

Chris King of Stifel, Nicolaus & Co. noted that the deal implied a premium to U.S. Cellular's $3.7 billion enterprise value.

Sprint is paying $480 million for 10% of U.S. Cellular's business. Extrapolating the company's total worth, by the crudest math, would suggest another $1 billion or so in value.

However, leaving markets such as Chicago and St. Louis could make the rest of the company a less attractive target.

"We believe investors are theorizing that the whole company becomes more difficult to sell without the most valuable spectrum in the company's portfolio and any M&A premium that was built into the share prices are being eroded today as a result," King wrote.

Post-deal, U.S. Cellular would still have more than 5.2 million customers spread across New England, the mid-Atlantic, Pacific Northwest and Midwest.

Sprint last month agreed to sell a controlling stake to Japan's Softbank Corp. for $20 billion. The carrier is also boosting its holdings in Clearwire Corp.

Wells Fargo Securities LLC senior analyst Jennifer M. Fritzsche in a note called Wednesday's deal "a logical move" for Sprint and "an intriguing" one for U.S. Cellular. The seller, according to Fritzsche, "appears to be placing its focus on the rural markets where it is apparently much more profitable due to the higher penetration it has as well as the roaming revenue it generates from other carriers."