Some investors seem worried that the companies can overcome regulatory hurdles, while others may have been disappointed by the price tag, set at Friday's closing prices.
Sprint's stock fell roughly 14 percent, trading below $6, while T-Mobile was down 4.3 percent as of 3 p.m. ET.
Others on Wall Street doubted the $43 billion in synergies projected by the companies' management.
"We believe the merged firm would generate slightly less synergies than management assumes," Jeffrey Kvaal, Nomura Securities managing director and analyst, wrote in a note to clients Monday.
The all-stock deal worth $26.5 billion announced Sunday would combine the nation's third- and fourth-largest wireless companies, bulking them up to a similar size to industry giants Verizon and AT&T. The combined company would take the T-Mobile name and be run by T-Mobile CEO John Legere.
The two wireless companies attempted and failed to combine in 2014 under the Obama administration. This attempt is also likely to face scrutiny from Donald Trump's White House, which has chafed at AT&T's proposed acquisition of Time Warner.
Analysts at Wells Fargo downgraded both stocks from "outperform" to "market perform" Monday, and are "moving to the sidelines" due to concerns the stocks will be range-bound until the regulatory view becomes clearer.
"Our downgrade primarily reflects elevated regulatory scrutiny as an overhang on the shares," Wells Fargo Securities senior analyst Jennifer Fritzsche said. Fritzsche said she discussed the deal with regulatory contacts, and their message was simple: "This won't be easy."
With no breakup fee in place, the burden of risk is more on Sprint than T-Mobile in terms of this regulatory uncertainty, Fritzsche said.
If T-Mobile succeeds, though, it could be in a strong position with deep spectrum assets, a well-perceived brand and a management team that has successfully integrated past acquisitions, she said.
"It would have the most impressive spectrum assets of any of the three remaining players," Fritzsche said. "But, as we have learned (multiple times) in the past, the M&A path is often not a linear one."
Consumer advocacy groups have also voiced concern over T-Mobile's bid for Sprint, citing the risk of higher-priced cell phone plans because there is less competition.