Short Interest, SI, the number of shares reported held short as accounted for in the previous two week period, has increased by 4% as Sprint stock moved to the high end of the recent trading range. The figure remains off the all-time highs reported late last and early this year of over 210M shares but is in the range of historical highs.
What does this tell the average small investor? Short Interest is among the most reliable indicators. We may guess that is because short sellers tend to be hedge funds, institutional investors, and more experienced individuals. Only a small percentage of investors sell stocks short. The risks of selling short are theoretically
limitless because a stock can keep going up whereas it can only go down to zero. However, like pros who take positions long in stocks, if the trade turns against them or the fundamental picture of the position changes, short sellers shift in or out of positions accordingly. Professional investors are supposed to look at facts, figures, technical analysis and other factors which increase odds of investing and not get married to their investments.
Why did SI decrease from the highs? Likely because although Sprint has failed to gain sales momentum it has taken steps to cut expenses and pay off debt. When a company has accumulated risky levels of debt, hedging of that debt often occurs by selling the stock short. Others join them.
Sprint has lessened the risk of default at the sake of selling off assets owned, ostensibly, by common shareholders. The stock holds no greater value, and probably less, due to buying of time for a debt reconning.
Pros also look at technical analysis - it has shown, as I posted, S has been mildly bullish recently .. but would come up to stronger resistance as it approached previous highs. SI has historically moved up when the stock did, down when the stock went down... a good indicator of future movement.
Nice joke. It is not hedging with futures options. That is a diffreent thing than short interest fellow idiot.
You are a total dit in understanding corporate finance.
Softbank has not and will not gift Sprint with money. The only way SB is investing in Sprint to clear up its debt is to buy its assets. That leaves Sprint S shareholders holding a bag that Softbank repeatedly puts their hand into to grab out the contents (candy... leaving the bag with fewer assets. If Sprint does not miraculously turn around to make billions of dollars in profits it will not have the funds to buy back the assets and will slide into, best case, a asset poor shell with the profitable parts of the business assets and cash flows retained outside of the company by Softbank.
You foolish people do not seem to grasp what is going on. Did you pass 5th grade home economics class?
"How not to be a Total Financial Dit.. for Dummies" . recommended reading for gfoss1102
Softbank is not laughing to any bank dumb fartitis. They bought Sprint thinking they could infuse it with technology and turn it around like they did with Vodafone Japan. The result has been that Sprint has headed deeper into debt with maturities due. SB nor anyone else is going to bail this wrecked company out of debt for free. They own about 84% of the shares but all that could be lost if Sprint goes BK. So SB is buying asset and cash flows to bail out the debt. That is far from stealing.. if you think it is, sue them.. the lawyers will laugh at you as I am. Buying Sprint's assets is being done as special rights companies whose assets can survive bankruptcy.
You must be about 18 years old because your understanding of finances is comic book level.
Wrong on all counts: The cost of deploying smallcells increases the cost of network deployment. It does help to lower the cost per bit by greatly increasing the broadband density - the amount of bandwidth available per area/user. However, that increased efficiency has a major gating factor: the density of usage must be high enough to provide a quick payback (1-3 years) so that capital can continue to be spent building out higher density in more areas and increasing density where needed. Another problem is that ALL major and many small operators are deploying smallcells. Having a disproportionate amount of high-band spectrum creates a chicken and egg conundrum: an operator needs more subscribers or more services sold to existing subscribers to afford to build higher density. If they "built it and they will come" proves to be a false field of dreams, as it has for Sprint, and the operator has increases losses instead of billions of dollars in profits, then they cannot stay competitive.
Competitors are using low and mid-band spectrum including wideband channels that cover more area and can be 1/4 to 1/2 the cost of using S's 2.5Ghz. Using smallcells costs operators about the same.. if one of them figures out how to lower the cost of deployment the others will likely follow. Sprint's current costs of deployment are higher than its competitors because it lacks sufficient low and mid-band spectrum. Sprint may shave tens of percent of the cost of deployment and will still have a higher cost than competitors to deliver bandwidth-to-coverage.
I have been saying that for years while Sprint has been saying they can suffice with their spectrum and deployment plans. It is now history - Sprint's strategy failed.
1. Softbank IS using special rights companies. The Leaseco arrangement can be read in the company's SEC disclosure documents. The CFO said that Spectrum Leaseco (name TBD) will be set up similarly.Did you bother to read the SEC docs? Not likely or, if you did, your comprehension level is back row grade school.
2. Softbank is prohibited from acquiring 100% of Sprint because foreign companies cannot acquire 100% of a major US communications company. Maybe if Sprint slips further it will no longer be considered a major player, and regulators and Congress will allow it.
3. Sprint is already technically bankrupt. If the company's cash flows and P/L are projected forward along with debt maturities and buy-back of the new sale and lease-back provisions, Sprint is unable to repay its debts while retaining its assets.
I realize that your ability to understand these issues is limited. I won't try to explain it further - you should have picked that up. It is your job to not lose or make money. That starts with knowing what you know and what you don't know and either filling in the inadequacies or doing something you have or can master.
You most of it right.. except the assumption made by the part "Paying off the debt would also appeal to a buyer. " Sprint is effectively swapping out/rolling over existing debt instruments, the bonds that need to be retired this year and next, for new ones, the conditional sale of assets with lease-back and repurchase provisions. The amount of total debt continues to grow for as long as Sprint continues to lose money. The old debt will be paid back, however, the new debt must also be paid back or else Sprint will lose the rights to the assets. In essence, the Leaseco company set up by Softbank will foreclose on the portion of Sprint that is represented by the sold assets.
Folks, this should not be hard to understand. Money does not grow on trees. Maybe your daddy or mommy gifts you with free money but that is the only place you will find it. Softbank/Masa Son are not so stupid to gift Sprint with money while they remain the 'Biggest Loser' among the top four operators. Unless Sprint turns 180 degrees around and makes a profit of about $0.8 billion dollars each and every quarter without funky accounting AND is able to 'spread the goodness' (borrowing from T-Mobile's CFO) by investing a competitive amount of money back into the network, Sprint is heading for the financial rocks.
Tweaking won't cut it. Softbank is the only entity in the world willing and able to buy assets from Sprint to pay down debt. Sprint does not qualify for high yield junk bond loans to replace the maturing debt.
The only way the new secured debt instruments will lower unsecured debt is if S turns 180 degrees around ie. competitively profitable. That has become almost impossible.
investors can expect Sprint management to say things are improving here there and under their armpits. What else can they do?
Softbank charges a lower interest rate primarily because the debt is secured with assets.. come on man you should pick up on that without any effort.
What would have happened if Softbank went down the path of exchanging some capital for the 'crown jewels' assets is that Sprint would have headed into insolvency by the middle of next year because they would not have been able to pay off the maturing debt and stay competitive. The attempt to buy customers with 50% off discounts to competitors has not resulted in the windfall gains in subscribers needed. Instead, it has resulted in continued losses.. lower consensus forecasts after the results of the last quarter.
What would you do if you had a business that you knew was going BK? I worked at a textile company during college days and the company was heading toward BK. The owners factored receivables, something common in that industry that is very similar to the sale of Sprint lease receivables to SB. And they did several other things to gut cash flows including some off-the-books stuff that was illegal; as if anyone would every have prosecuted it. Softbank appears to be doing everything legit because part of the goal is to attain a position in BK that survives the financial restructuring.
SB is securing key assets that will likely survive BK and, whatever happens, are the most valuable parts of S's business. That makes sense doesn't it? If a miracle happens and Sprint makes bookoos of cash to repay debt, finance operations and expansion, then they will buy back the assets. Otherwise, which is much more likely, Softbank is in charge of the operating and fungible assets when Sprint goes belly up in the eyes of the law/bankruptcy court.
Should be "What would have happened if Softbank had NOT gone down the path of exchanging some capital for Sprint's 'crown jewels' assets"
Some may not understand why Softbank would buy assets from Sprint because they already own about 85% of the business. All shares of Sprint are subordinate to debt and long-term obligations such as leaseholds on cell sites contracted through tower companies and leases on the spectrum that Sprint has with many 2.5GHz EBS license holders. Softbank does not want to head into BK to have bondholders and others come away with the right to carve up the valuable pieces of the business in bankruptcy litigation, sell them to the highest bidders until S's obligations to them are resolved. I posted on this over two years ago.. that SB should carve out assets to fund Sprint and set them up as protected. When Sprint heads into BK Softbank can show that they did everything reasonably expected of a parent company to put Sprint on tract and that they hold senior rights over common stock shares and the unsecured debt of the bond holders. This also puts Softbank into a position to negotiate outside of court: They might avoid full BK filing by arranging a debt restructuring. That could be posited as 'better to work with us than against us because we are in a position to prevail in court'.
In BK court, SB would be in the unique position of being the only party able to survive legal challenges and maintain the mandate of a communications operator to continue to provide a public service. Common shareholders' rights would be exhausted (or nearly). Yes, that would include Softbank's rights but they would be in a position to acquire the shell company and reassemble it devoid of overly cumbersome unsecured debt and unwanted lease obligations.
More inklings of what is being prepared can be gained from recent FCC filings.. it is in there if you know what to look for.
LOL! Sprint has already been sold .. debt holders, tower lease companies, and Softbank own the survivable interests. Common ShareZombies hold a bag full of long reneged promises. Good luck suckers... take pride in knowing that it takes suckers like you born every minute to keep the stock market working for losing companies.
You do not know your #$%$ from a whole in the ground re: Sprint.. why are you acting like a fool? Waste of time.. -click - -iggy-
The numbers compel the situation, not grade school polemics.
Do you wear your #$%$ on your shoulders?
- "Since SoftBank's own problems naturally weighed down on Sprint, this could be a positive for S." You have it totally backwards - Softbank has been put into a financial straight jacket by Sprint's rising and maturing debt.
Mobile network technology, equipment, devices, and deployment practices have been evolving to embrace a more unified approach across all transport media. Over the past few years every major US and most smaller operators, (what is left of them), have deployed networks using mostly the same sets of 4G-5G vendors. The differences that remain boil down to operator efficiencies and pockets of coverage. That allows Sprint to do some cherry picking of data, such as de-emphasis of rural and in-building coverage to proclaim that they are within 1% of consumer market leader Verizon and AT&T in network reliability.
It is a clever move to make use of Verizon's prior "Do you hear me now?" ads spokesman to make the case that the networks are now basically offering the same level of performance so that paying more to ride on the Verizon network is screwy.
The basic claim that networks are much closer together in performance is validated by all major network surveys. However, the claim that reliability, itself a cherry picking among the network performance metrics, is within 1% is a selective culling of the data. The performance of Sprint's networks fits their mix of spectrum: coverage into suburban and rural areas and into buildings is weaker outside the core metro markets. Sprint may come within 5% or 10% of Verizon across the board. Where performance still sucks is in 'bandwidth-to-coverage'.. the median bandwidth across all areas. Where 2.5GHz is sparsely built out , broadband must rely on narrower bands of mid and low band spectrum, resulting in 'lumpy gravy' coverage. Studies can artificially accumulate the data: the high bandwidth areas where wideband 2.5GHz signals are strong when combined with sub-par bandwidth where the narrow-band lo-mid band is used misleadingly averages out to look competitive. The disparity arises from underspending in the network - about 1/10th the density of SB Japan.
Will Sprint's advertising result in subscriber growth?
I think the ad is right on target with the message Sprint can play given the cards they (have) are dealt. Networks have inched closer together in performance. However, there are distinct differences that averaging of survey data hides. In the past, Sprint tried to claim network supremacy by using peak data rates in areas covered by the 2.5GHz band using the latest carrier-aggregation capable devices. That may have worked.. the 'market' is made up of pretty stupid/shallow-thinking individuals. However, Sprint's results show fewer new subscribers than even a critic like myself may have thought likely and much less than most financial ANALysts. Sprint has been saying their network is good for several quarters but subscriber counts have lagged all major competitors with only a few instances of spot success that get thrown out with the wash water.
The results are the results.
Will clever advertising now change Sprint's profit/loss trajectory? Sprint has a huge gap between losses and the level of profits needed to back-fill the debt gap, repay loans and lease rights deals, and build to higher density.
My guesses were overly optimistic: I said Sprint would likely show much higher gains in subs due to the aggressive 50% off sales campaign and early contract termination buy-outs. I think it highly unlikely that any sS&M program can change public perception because 1) The market is mature with low levels of churn among competitors, 2) Sprint's use of the performance metric will not ring entirely true. Bandwidth-to-coverage will continue to lag competitors for years to come. 3) It takes more than being equal to win back customers. The 50% off deals come across as phony baloney much of the time.
Bottom line: Sprint cannot afford to sell service at near to a 50% discount to competitors. The network build is more, not less costly to achieve parity.
As always, watch the results for a miracle.
The Bernie Madoff episode displayed what seasoned people in the financial industry come to understand: that the SEC is so under-staffed that they focus only on the letter of the law and exclude all but the easiest cases to prove in court. Parkervision has, from the beginning, been a study on how to bilk the system from within by performing to the letter of the law while hiding the scam behind the FUD of uncertainty that surrounds 'high tech'. The SEC does not make any rulings on the validity of patents or the use of technology in products. They do not even go so far as to hold management responsible for wild claims that repeatedly prove to be false... particularly when the company is 'lawyered up' as has been the situation with Parkerscamavision.
Scams take advantage of the difficulty of proof in finding fraudulent behavior when it comes to high tech. Parkervision hired experts in patent law to get bogus patents through the system and then used them to get additional funding. I can't tell whether they also participated in shorting the stock or other stuff because it is not public or leaked information. There is no law against a company official or fund manager buying and also shorting a stock unless that is done to damage their investors or on insider information. The SEC could look into that but I doubt it.
This investment is not rocket science: PRKR has not produced results, has not lived up to the many promises, and has had the patent portfolio effectively gutted due to adverse rulings. The company has devolved to selling rights to patents in order to secure further funding to just keep the doors open.
PRKR is beyond being a Zombie stock company.. its rotting and stinks to high heaven.