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Here's Why Sprint Corp. Shares Gained 12% in August

Daniel B. Kline, The Motley Fool
  • T
    TEAMrep Maravedis YourDeal
    The reporting of Sprint's results are out of wack from the financial and strategic position that the merger documents and broad financial analysis paints:

    Sprint has lost, not gained, marketshare over the past seven years: Sprint went from 17% share to 13% now. Subscriber counts alone can be very misleading as they are not financial statistics except as they benefit the top and bottom line financials. Cash flow analysis also is lacking: cash flows can be manipulated by cutting back on deployment costs and competing on the basis of price. The problem is that these are not sustainable: Sprint had cut back on capital spending plans about four years ago after it was found that being the lowest cost provider resulted in only a relative trickling in of subscribers... in fact not even enough to keep up with competitors share of growth in the industry. That is why Sprint has lost marketshare even while the media tout gains in subscribers - they are failing to follow through to understand what the long-term impact of Sprint's strategies has been.

    Over the past six years since being acquired, Sprint's debt was restructured but no reduced. Debt grew from $32 billion to over $38 billion today ($40B total according to the SEC merger docs). Sprint would face a more challenging competitive environment going forward as a stand-alone company: all US operators must increase spending on 5G to stay competitive for current services and carve out their share of emerging and cross-over markets including home broadband and media. Sprint has about $13B of debt that is coming due over the next five years while it needs to increase capital spending by about $10B in order to be seen as competitive. Sprint's market image is already that of a laggard, low man on the totem pole while its competitors, particularly Verizon and T-Mobile have the image of pursuing advances in technology and new services that result in higher customer satisfaction, higher revenue, higher margins, and higher profitability despite a growth in CapEx plans.

    Without the merger, Sprint will be more useful for investors as a gauge of how low a company can sink compared to the profitable three valid competitors.
  • s
    Sprint went down due to the merger. The only reason it went up was because its improving its number not the merger
  • s
    Stay out of Sprint with this reverse split BS. This stock will go up if this merger does not go through. Sprint has turn around and the company is doing better
  • C
    Sprint or any telecom company will not have a future without 5g wireless.imho
  • s
    BTW TEAMrep is a paid Merger Pumper
  • A
    are these two idiots getting along now? I lost money from sprint.. damn it