Wrong: Sprint announced the leasing model before earnings and said during the cc that Softbank would help set up a third party leasing company and push the up-front lease costs off the book. The impact of leasing is a wash: the customer must be given a competitive net monthly bill regardless of whether the cost of devices is subsidized or leased. What does a lease do? The company offering it pays to supplier up front and then charges the customer each month to pay that off. That is what happens when the device is subsidized except the cost is hidden from the customer in the monthly bill. Since long term contracts have come under attack, subsidizing devices is not competitive, while leasing is.
"The leasing model will help get long term debt under control." You must like to make stuff up. The lease arrangement through a third party accelerates payments but requires paying the leasing company a percentage of the proceeds. That accelerates cash flows but washes out as a run-rate impact. Lenders are not nearly so stupid as web board readers. You may like fairy tales rather than facts - financial analysts have commented on this as having no material impact on long term debt.
Like any other form of cash flow acceleration, such as factoring of receivables, this could help the long term picture IF Sprint were to experience a much better ROI... if they actually were making profits then an incremental increase due to the accelerated cash flow would be seen.. think of that as borrowing an additional $1-$3 billion.. if the near term profit due to the near term shift of cash flow produced a profit, then S would have X profit variable times the increase cash flow divided by the time acceleration (say 6 months or 1/2 year). If, on the other hand, Sprint continues to lose money, then this arrangement accelerates the rate of cash burn by a similar factor.
These companies are highly competitive, each with its own strengths and market position. Sprint has no choice but to take advantage of market disruption caused by the acquisition of DTV because T will be going after both existing AT&T+ DTV subscribers and competitor's phone customers, including Sprint.
The market is in a continuous state of change: the new wave of change will be offering of more TV/Movie and streaming video (such as events) services to mobile customers. Both Verizon and AT&T have invested and acquired their way into positions to offer video as unique offerings that Sprint and T-Mobile do not offer (directly). Sprint's move can be seen as both a preemptive strike to take share from AT&T but also as a defensive move to prevent Sprint subscribers, particularly those who are also DTV subscribers, from signing up for the discounted AT&T+DTV service.
As unlikely as it looks, JP must try to get more funding and, since sales are zero, the only way to do that is to prop up the notion that the remaining patents are valuable. Investors sometimes act ignorantly... so while unlikely, its always possible Jeffrey, Snake Oil, Parker will be able to sway some dufus to invest in PRKR.
Another way to look at Sprint's situation and the free 1 year service offer is to consider that competition pursues disruption in markets as prime opportunities to gain share. That is exactly how Verizon and AT&T saw Sprint's acquisition of Nextel Netwrecks' iDEN platform and the following demise at the hands of 3G push-to-talk. Years afterwards when Sprint finally bit the bullet to convert the iDEN network, Verizon and AT&T saw a windfall 11 million customer defections. T-Mobile got some of them as spillover but had not yet ramped up it networks and marketing campaign.
Any time a major operator is going through a transition in networks or service plans is a time to strike. Customers are more vulnerable when faced with a choice. In this case, "Do I give up my service with VZ, T-Mo, or S to have both satellite TV and phones on one account or do I take advantage of a free year and what looks like lower monthly cost afterwards to try out Sprint while sticking with AT&T's DTV service?".. "Hmmm, I can always go back/sign up for AT&T if Sprint's service isn't good enough."
All operator's networks have improved as LTE, Long Term Evolution, has become widely available and a more mature technology (its designed to evolve so its never entirely mature). That makes choices between carriers more based on finer points of coverage, bandwidth-to-coverage, dropped call/connection rates, etc. And that makes the task of gaining share more one of getting customers to sign up and start using (becoming habituated to) their devices.
Sprint, and the US wireless industry, find itself in a market that is saturated. Verizon and AT&T hold a combined ~70% marketshare. Meanwhile, Sprint has fallen to 4th place and is struggling to refurbish its brand image as a supplier of reliable service networks. Taking share away from either of the two market leaders has proven very difficult. Part of Sprint's answer is to go after AT&T, seen as the more vulnerable of the two at a time when they have acquired DTV. The acquisition of DTV puts those customers up for grabs as they are made offers by T to switch from other operators, including Sprint, for their mobile service. The time to catch the ball is when it is up for grabs.
What is Sprint giving away? A year of service. However, that is at a cost already amortized into the network operations. The customer must buy a new device and pay for taxes and telecom access fees.
The cost of acquiring a new mobile customer, CAC, customer acquisition cost, can be very high: the cost of acquiring core postpaid mobile customers from AT&T or Verizon is several hundred dollars. When considering Sprint's situation, the cost might easily be described as a Kamikase strike: a direct attack at the most vulnerable targets and point in the overall 'war'.
Sprint's 'war' is not just to go after AT&T's customers, per se, but to change the market perceptions of Sprint as a new kind of operator willing to put customers first. Sprint must make bold moves to show itself to be at least equal in 'Un-Carrier' approach to the market.
Another reason the free 1yr service offer makes sense is that customers often find giving up their devices a harder choice than giving up the networks (operator) they run on. Your device holds your apps, connections, settings, and is tied to family and co-workers. Making the service free removes one of the barriers. Sprint Direct 2 You program helps, where available, remove another - provides subs a personal visit to transfer the stuff.
Jeffrey Parker is an incompetent boob. PV has no chance of reversing CAFC's ruling. Furthermore, the patent portfolio is in the process of being debunked as invalid. Parkervision/McKoolaide Smith have nothing left but their LSD spiked punch bowl.
The record will live on despite the lack of a precedent setting ruling: McKool Smith has besmirched the firm's reputation which may lose credit with worthwhile patent holders, casting themselves as the crusader for Patent Trolls during an era of a loosey-goosey PTO system.
Parkervision has become recognized as a Patent Troll and stock scam company that will soon be bankrupt. For all that matters, it already is. The legal campaign is being forced to be shut down whether the idiot Jeffrey Parker et al wish to admit it or not. The remaining few million$ will soon be exhausted. The 24c stock price will evaporate to zero.
The only reason to keep this board open and stock trading is so the company can wrap it up, leaving shareholders nadda.. which is exactly what has been destined from the start.
What to do now:
Traders may wish to take profits if not already triggered by stop-loss orders. Long term and trend investors may wish to lighten up or to sell covered calls. NOV 5s are fetching 45c-60c. Volume on call and put options is low.. most strike prices are in the 100s.
Sprint (S) price is being supported by parent company Softbank's purchasing of about 4% of shares that will take it up to 85% ownership of the company. That buying makes shorting of the stock risky as long as it is in place. Sprint (S) has moved up from lows near 3 to 5, a gain of 67%. Those fortunate to have bought near the low may wish to take some profit off the table. Long term investors or for tax reasons, may wish to sell covered calls: selling of the NOV 5's, for example, would lock in an 13% gain from the initial position in addition to the current paper gain of up to 67%. SEP 16 5 calls are at 46-50c. The expiration is just 18 days away.
Why sell calls instead of selling the stock? Over 80% of calls expire worthless or at a loss. Time decays the value which tends to vary more than the underlying stock due to the higher leverage options provide. In general, option sellers/writers make money while buyers lose money. Retail/small investors are at an advantage -large numbers of options are harder to sell or buy. If you sell options while holding the stock, you are liable for taxable gains on the option, not the underlying stock appreciation.
Losers like losers: a double in Sprint's stock price will about get your average bullish recommend back to break even.
Consumer WARNING: "Reading greekmonster's post may be dangerous to your (financial) health"
OK. Point 1 to points 1.53: Sprint (S) is broken down financially and must find a way to close the gap, pay down debt, finance competitive networks and services or will drown. All other points are.. pointless. The fact that there are priorities of points eludes your apparently senile or juvenile level of thinking. This is not a pep rally where cheering on Sprint changes the fundamentals of the game. The employees are not players on a football squad that determines who wins.. you are not someone in the stands cheering to inspire one more play that will carry the ball in for a goal.
All points are invalid until they add up on the bottom line. What is your bottom line? 53 points on a list that reaches no conclusion? OK, just one more bucket list. Do the analysis and show the results. Your results? losses for you and those who acted on your advice.
Buy $37 billion in debt? DISH/Ergen are not made of so much money they can pump $37B down the drain and have money leftover to do more than contemplate their navels. What good is Sprint to Charlie unless it either turns around and generates profits instead of adding to losses AND is is sold cheaply enough to make building out new networks on the combined spectrum doable.
Sprint has sunk, despite Softbank's money and skills, to a money losing number 4 carrier spot that looks unattractive to DISH unless sold in a bankruptcy proceeding with most of the debt absolved from the balance sheet.
T-Mobile is a stronger company.. but why would they want to sell to Ergen? They apparently don't... having spurned his overtures. DISH is in a weak position in building mobile competition. The company has spectrum but no clear plan to use it. Ergen is still all shuck and jive in the mobile space. He needs to venture into a new form of network that shifts competition to a lower price point through more effective building and use of technology or he is #$%$ into the wind with his mouth open imo.
You are the biggest single loser posting on the Sprint stock board. Perpetually long.. and most of the time in the past wrong. Sprint is undervalued as a brand name because human beings do not like losers, period. Change the direction of company network build costs/benefits so that the much touted better networks at lower prices is not just another CEO blowing it up your kazoo and the brand image will gain value.
A company, CEO can do lots of things right.. they must do the gross number of things right to win against all competitors in networks, capital utilization, brand image... the whole business venture... before anyone can say the brand image is undervalued or overvalued. Bankrupt companies brand image becomes sold off in bankruptcy proceedings... or assumed by Softbank. It is not worth more than the value of the enterprise and cannot substitute for the value of the enterprise... its only one component.
"Sprint" brand name may survive as a good brand for tennis shoes if Sprint fails as a telecommunications company. There is no certainty that won't be what ends up being written in the B school case studies on Sprintsy winsty.
The not so smart ones.. so, retail investors are the smart ones who will educate the short selling institutional/hedge fund investors and pros who have made ~$20 billion shorting Sprint (S) over the past 15 years? LOL! Softbank is a professionally run, ~$70 billion company that has put a squeeze on the ramp in short selling... but do not confuse that with a general trend for either the stock or the company. Sprint must show a new trend emerges out of the relative ashes of past uncompetitive management and financial performance that caused the stock to be targeted by the pro short sellers in the first place. The best/only way to confront short seller/sellers in general is to get the company performing as good or better than the companies that have been printing money in the same business. A stock buy by the company or sell by shorts is the end game, not a solution. Sprint bought to save S from continuing to fall off a cliff into a financial abyss.
Ask this: What would have happened to Sprint if Softbank would not have been given the unusual ability, as a foreign company, to acquire over 80% of it? Ans. It would be technically if not legally bankrupt by now. Softbank has tried desperately to turn Sprint around with some success but not enough that it became beset by sharks wanting to bleed it dry. Softbank had no choice, when all's said and done, but to try to salvage Sprint.
Investors/traders see that and sell when it is time, buy when it is time, and, being small, protect on both sides of the trade. Shorts in control? Ride them down. Softbank in control, ride them up. Place orders, trend following stop-loss orders.. take the 'heart of the trade' and let others tirade about shorty, bashers and hypers. S trades in wide swings.. caching, caching, caching. Where the company eventually goes is not your/my problem. Some other idiots are responsible for that.. not our job.
The only reason they are buying shares is because they think they are cheap? That is a lame simplification/excuse. Sprint (S) shares have been under pressure, declining to $3, near the low water mark over he past several years. Shorting increased. Several financial analysts, among them the most highly regarded in the industry, foretold Sprint continuing to report losses even as its financial strength and competitive position continues to decline. Softbank is buying shares for two reasons: to defend the share price of their ~81% ownership stake and to reverse the apparent death spiral in company finances.
When a company reaches a certain point of financial decline it can become a foregone conclusion as further funding becomes more difficult and expensive. To reverse the situation required Softbank to take actions that were more assertive than Masa Son issuing assurances as in the past.. Softbank had to step in to shore up its equity position. The plan was said to seek lower interest rates, more flexible funding of device lease cash flows, and other measures that could have collapsed if the stock price remained under the pressure of a bear raid by short sellers, some of whom are probably one and the same as the bond holders who hold current high yield sub-investment grade debt. When there's blood in the water, you want to be among the sharks biting off chunks of flesh... not the shark bait. Softbank has taken measures to defend their assets. Longer term that will have to lead to a reverse in fortunes. Not the Zack's ANALysts 'Surge' in earnings from loss to milder level of loss.
Sprint has to make innovations that take the fight to the streets.. from the user's network device up.. Or Sprint will become road kill regardless of Softbank's #$%$ on the chain.
To become a member of Investment Bashers International you must attest to the following:
1. Keep an open mind for the pros and cons of each stock, bond, mutual fund, sector index or other investment. a. Even when you go long or short a stock. b. Even when a company has proven to be a financial basket case or otherwise shown years of behaviour IBI members must be open to change for the worse or better.
2. Put worthless pro or con hype posters on ignore. If you have no fresh information or ideas, then do not post because it is a waste of time.
The objectives of IBI is to seek out profit, not profess either long or short positions for their own sake.
Just say the moto and you have joined: "I am a basher of ignorance and darn proud of it."
Agree. Sprint (S) bounced off the resistance level near 5 last week. Despite reports of continued buying by parent company Softbank, I suspect S will fail to break out above this level in the near term.
A study of auctions of 2.5GHz spectrum shows that the highest amount paid worldwide was for an auction in Hong Kong, a very densely populated part of the world where the spectrum fetched 0.24 EU or about $0.30 USD. The band 41 spectrum is designated by ITU as the 'extension band'. Guidelines for allocation are for band call for designating about 2/3 of it for FDD and 1/3 for TDD. A primary distinction between the US and many other countries is that they are engaged in reallocation of the band.. in other words, they are starting out with a relative clean sheet of paper upon which they are designing the use of the band to accommodate nationwide wireless services that will work in harmony with band allocations of many other countries around the world. This is very important in order to achieve interoperability of devices and networks.
Why is Sprint so screwed up in making use of Band 41 spectrum? It starts with the spectrum licensing being screwed up by regulators and political interests. The 2.5-2.6GHz spectrum was long considered too high a frequency to be useful for mobile/mainstream commercial applications. So the government agreed to give about 2/3rds of it away to educational and religious organizations for use in their local to regional fiefdoms. This communistic gifting of public spectrum has resulted in a nearly unused expanse of spectrum that is out of harmony with internationally adopted allocations. That makes Sprint's job of using it or of selling or leasing it to other operators very difficult... and is what lowers the valuation considerably... as Sprint's own report testifies.
Sprint 2.5GHz spectrum valued at $7 to $12 billion according to Sprint's own report. An updated valuation based on the recent auction of 2.5GHz paired spectrum in Canada puts the value of Sprint's ~130MHz of 2.5-2.6GHz spectrum at $21 billion. However, the Canadian spectrum is much more cleanly organized into FDD channels and is not mired in the political hacks of the 2.5GHz EBS sub-leaded spectrum that makes it cumbersome to put to use nationally. Unlike most analyst reports, Sprint's own report takes this into account, discounting the value of the spectrum to from $0.05 to $0.20 per MHz-POP.
Why would Bloomberg Intelligence (sic) place the value of Sprint's spectrum more in line with recently auctioned AWS spectrum? 1. Lack of understanding of wireless. 2. Lack of understanding of how spectrum is used. 3. A buy-side analyst firm has an inbred bullish bias
Longs in Sprint have been the losers of about $20 billion buckaroos over the past 15 years that went into the pockets of those dastardly short sellers. You lost, they have your money and now you are boasting over some table scraps? That is not facing the reality of Sprint's stock history. How can you base investing on lying/ignoring the truth about what happens to a stock?
Sprint shot up to $66 during the telecommunications and Internet stock bubble during which time short selling in Sprint (S) peaked at around 160 million shares. Since then, S has traded down as the broad trend..down and up repeatedly as they hype driven cycles shifted the stock, often more than the fundamentals of the company deserved. Sprint's basic situation has been that of a debt ridden company always scheming to turn around its fortunes while always coming up short. That makes for a good pun... Sprint struggles with a new half-baked plan that does not compute on the basis of delivering a long term ROI (a positive near term ROI would be a saving grace about now). Sprint has been sick.. perpetually sick. Sicker than the company let on.. or perhaps the management, BOD had themselves fooled into thinking they really were going to turn around Sprint by going against the grain in technology to the point of exhausting the patience of many customers. "If we ride out iDEN for five more years we will have thought of some way out of our mess".
Many times over the years I have thought "This has to be the plan.. these guys cannot screw this up so badly on accident."
Sprint (S) has since pulled back to the 4.50 level. The chart suggests it will probably settle into a range between 3.85 and 4.95 which is a nice swing trading range. Besides the technical support that has formed at ~3.85, Softbank is likely to shore up the stock against steep declines, using the support level.
Smart investors prosper.. perpetual longs traced Sprint's decline from 66 to 3.10... which cheers and rants. Rip, rah, rah.. which side are you on.. the self-aggrandizing pseudo investors or the smart, play the cards as they are dealt investors? Who cares.. that is just another story based on emotional mental masturbation.
The facts are that the government has grown larger as a percentage of GDP under both Republican and Democrat control of Congress ("the purse strings") and Democrats. Both parties have, at times, said controlling deficits is important and both parties, when it boils down to it, have proven that to be a lie designed to sway votes.
OK, both parties are lying barstools... take that as endemic of the system.. and what more can the public expect.. because about half of them are lawyers, used car salesmen, or from industries who are granted government monopolies or depend on their contracts. "Follow the money" is a truism that hardly ever fails.
So, the question is, "Why are American's so gullible or stupid?" to be suckered into the same game over and over again? People decide to run for office out of the kindness of their hearts, right? Why is it that most politicians personal wealth increases 3x or more by the time they leave office, at which time they have lifetime health insurance and pensions and probably jobs working for lobbyists, sitting on the boards of companies like Sprint, or working in the defense or other government funded enterprise or state sanctioned monopoly? "Forgetaboutit, we'se in Jersey now".. The government isn't quite the mafia ... of course not, it has the law behind it! ; ^)