Sprint gets a downgrade by Sanford Bernstein analysts- Bankruptcy risk raised now to 50:50

[TheForce]

There were several disclosures this morning related to the risk potential at Sprint- It said that the cost to bring in the iphone will be $15.5 Billion over the next 4 years. It is not able to compete in the LTE upgrade due to the costs but hopes that adding the iphone LTE will bring in new customers and upgrade existing accounts to long term contracts will aid in the debt payback. Bernstein repeated in the report that they are not predicting Sprint bankruptcy but rather that the risk of bankruptcy is now teetering at 50:50. The stock began to sell off with the announcement. Disclosure- I sold off 80% of my holdings in accounts that were in the black this morning. Sprint has had a good year with a 24% gain YTD. I would have loved to hold for longer but at $2.80 a share I decided to bail and take some profits. I'm hoping the remainder I hold will get a pop and I can sell if there is any rumor of buyout. Sprint's main asset is it's spectrum holdings of high interest to other carriers.

 

[John Kotches]

I think this is warranted.

They haven't had success with their 4G technology selection. They started with WiMax and then decided (for reasons not known to me) to switch directions with a transition to LTE beginning in 2H2012. That partner couldn't get their spectrum approved and they had to bail from this at a cost of $65 million.

For me, the phones have been solid, and 4G good on my latest phone.

It'll be interesting to see how things pan out.

 

[navychop]

I wonder if they would let AT&T buy the spectrum, after the T-Mobile debacle.

Maybe Charlie will bid on it. The spectrum, that is.