Sprint: Mobile Not for Long

Welcome back everyone! Today we are continuing our segment on the largest mobile companies in the US, with the clash between AT&T (already posted), Sprint, and Verizon. Today's company is the oldest and the weakest - Sprint Nextel (S). Over 100 years old, Sprint was established in 1899 as the Brown Telephone Company. The company changed names from Brown Tel. to United Utilities and to United Telecom, at the same time it completed the first transnational fiber optic line in the mid-1980s. At this point, while AT&T and Verizon were puny startups while Sprint charted the future of mobile telecommunications and, in 1989, laid the first transatlantic fiber optic cable. This was the company's peak. Since then, Sprint oscillated to the top but now faces the harsh curve downwards, possibly never shooting back up. Other companies, including the two major rivals we discuss, took over the market at the turn of the century. The Information Era marked the end of a century of innovation and a fall to stagnant, uncompetitive times for the company masked by a final name change to Sprint.
As we look at Sprint's stock history (we only looked since the Information Era, we know there was tremendous growth prior), we noticed a disappointing decline in the price of shares. The end of the era's boost hit hard and the company never fully gained again levels from the 1900s. Fortunately, Sprint gained some ground again into 2006 and 2007. Since 2007, S has been headed by CEO Dan Hesse; mix a change in management in late 2007 with a recession in 2008 and the solution is devastating. Sprint, a company which sold shares for about $20 in 2007, now sells them for a weak $5-6. Unfortunately, Sprint Nextel seems unable to recoup from this devastating loss, and is on the road to failure. In late October, the company was suffering graver losses than usual and was forced to sell 70% of the company to Japanese Softbank Corp. Once Sprint files for bankruptcy again, we expect JSC to buy out the rest of the company or for another buyer to make the purchase. In the case of that happening, we hope services remain available in the US as to not have major employment and economic repercussions.
Although we know the company needs a revival of monetary trade, we advise against investing in S. Sprint Nextel is currently in a vicious cycle: loss of customers, loss of sales, loss of revenue, decline of EPS, less investing, and repeat. Investing in Sprint may revitalize the company a tad (if thousands of investors were to suddenly gain interest, which is highly unlikely) but for individuals looking for profit, this misses the target. This would be a waste of money and time in the long term.