Markets

Why Sprint is Getting Creamed

Things have not gone well for Sprint ( 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 ( T ) and Verizon ( 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 ( 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. This is what precisely happened. Sprint also utilizes Clearwire's 4G wireless broadband network and offers high speed broadband connection to its customers.

Our $4.75 price estimate for Sprint's stock is about 25% above market price.

See our complete analysis for Sprint stock here

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

T VZ

Other Topics

Investing Stocks US Markets

Latest Markets Videos

    Trefis

    Trefis is an interactive financial community structured around trends, forecasts and insights related to some of the most popular stocks in the US. Whereas most finance sites simply give you the facts about where a stock has been and what a company has done in the past, Trefis focuses entirely on the future.

    Learn More