Why Sprint is Getting Creamed
Things have not gone well for Sprint (NYSE:S) or its shareholders since its earnings report on July 27th. Its Lightsquared announcement and subsequent lack of a clear 4G strategy disappointed Sprint watchers causing the market to puke the stock 20% lower. Moreover, the company’s inability to control costs in the face of higher competitive pressures from heavyweights AT&T (NYSE:T) and Verizon (NYSE:VZ) coupled with the 4G concerns added fuel to this worry (see Competitors Smack Sprint Around Though Selloff Overdone).
However, the stock declined again by 10% yesterday, and time for a different reason. Clearwire (NASDAQ:CLWR) announced disappointing Q2 results yesterday as its losses were higher than street expectations, resulting in the stock declining by 30% in a single trading session.
Sprint has a 54% non-controlling stake in Clearwire, which means that any major stock decline for Clearwire will affect Sprint as well. [1] This is what precisely happened. Sprint also utilizes Clearwire’s 4G wireless broadband network and offers high speed broadband connection to its customers.
- Sprint’s Stock Looks Expensive Compared To AT&T After Rising 93% In 2 Months!
- Sprint’s Stock Price Doubled In 15 Days; Is Market Overvaluing Sprint Just Before Its Merger With T-Mobile?
- Where Is Sprint Corp Spending Most Of Its Money?
- Machine Learning Answers: Sprint Stock Is Down 15% Over The Last Quarter, What Are The Chances It’ll Rebound?
- Sprint Valuation: Fairly Priced
- How Does Sprint Make Money?
Our $4.75 price estimate for Sprint’s stock is about 25% above market price.
See our complete analysis for Sprint stock here
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