General Investing Forum

[JimBob]

Taking a larger hit past hour.

I bit the bullet and bought more at $2.96 

[foofoo982]

I don't think traders liked the news to move towers off the traditional lease companies. 

[laqn1283]

I don't think traders liked the news to move towers off the traditional lease companies. 

 

It is really a dumb idea.  Probably one of the worst 3 moves after Nextel and Wimax.  What a mess!

[sbolen]

I don't think we've hit bottom yet. The markets are going to keep getting hammered....

 

 

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[WillM]

I don't think we've hit bottom yet. The markets are going to keep getting hammered....

 

 

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Probably. I think the economy is heading into recession if it already isn't there. Certainly a few sectors are in one now.

 

I still don't get why someone would buy this stock other than they are gamblers. It has historically been a horrible investment. Take out the Matterhorn like spike of the telecom boom and It's really gone nowhere but down. Plus I don't think they have ever paid a dividend. They simply don't know how to make money which is why they will most likely be sold again or eventually merged with another company. I wish you guys luck!

[anthony.spina97]

Probably. I think the economy is heading into recession if it already isn't there. Certainly a few sectors are in one now.

 

I still don't get why someone would buy this stock other than they are gamblers. It has historically been a horrible investment. Take out the Matterhorn like spike of the telecom boom and It's really gone nowhere but down. Plus I don't think they have ever paid a dividend. They simply don't know how to make money which is why they will most likely be sold again or eventually merged with another company. I wish you guys luck!

Not sure how you would expect a company to make money when they are offering extremely aggressively priced cellular plans that don't make money, and on top of that, are doing a nationwide roll out and expansion of new technologies. Sprint isn't going to start making money until they cut costs considerably, and they start gaining large amounts of subscribers.

 

-Anthony

[Ascertion]

I know that the market is down, but I am starting to seriously feel some fear for my S investment.  Hopefully you guys can shed some light on this, but according to the latest Bloomberg article, Sprint's got 6 more bonds maturing within the next 3 years, they're currently planning to spend a ton of cash to relocate towers (might be false rumors), and they're about to start seriously investing in network infrastructure and upgrades (looks bad short-term with investments.) Sprint's ARPU is declining because they're having to compete on price, and SoftBank's stock is crashing as well.  T-Mobile is still growing/expanding at a rapid rate and they're pulling a profit, which sets high expectations for Sprint.  Sprint wasting over $25M from advisers doesn't help, nor does paying the Sprint CEO the most out of all telecoms.  It really just doesn't make sense to me what Sprint's upper management is doing.  Sprint also being very quiet about NGN plans or any other CCA/RRPP roaming partners is also concerning me.  

 

EDIT: To add to this, Sprint stock is also amongst the most shorted stocks at the moment.

[spotmeterf64]

Looking through this thread's history, I feel badly for a lot of people here. I hope most of you pulled out in enough time to save at least some of your money.

 

It is interesting to see how Sprint's stock has behaved since Marcelo became CEO. If we look at stock price, he hasn't been a good CEO thus far. He's introduced tons of confusing plans and promotions and added enormous complexity for everyone involved with Sprint: customers, employees, pundits, etc.

 

We have a pretty good network now in most places, but what else do we have? The most confusing plans in the business, phone wait times that are insane, overseas phone support with people who manage 5 other companies and thus are barely trained in Sprint's systems, sales reps who are scared for their jobs, new customers getting insane deals while existing customers get rate increases if they dare upgrade their phone. Promotions, credits and plans change almost monthly and it's impossible for anyone to speak with any amount of certainty when asked about them.

 

Hesse should have stayed in my opinion.

[laqn1283]

I know that the market is down, but I am starting to seriously feel some fear for my S investment.  Hopefully you guys can shed some light on this, but according to the latest Bloomberg article, Sprint's got 6 more bonds maturing within the next 3 years, they're currently planning to spend a ton of cash to relocate towers (might be false rumors), and they're about to start seriously investing in network infrastructure and upgrades (looks bad short-term with investments.) Sprint's ARPU is declining because they're having to compete on price, and SoftBank's stock is crashing as well.  T-Mobile is still growing/expanding at a rapid rate and they're pulling a profit, which sets high expectations for Sprint.  Sprint wasting over $25M from advisers doesn't help, nor does paying the Sprint CEO the most out of all telecoms.  It really just doesn't make sense to me what Sprint's upper management is doing.  Sprint also being very quiet about NGN plans or any other CCA/RRPP roaming partners is also concerning me.  

 

EDIT: To add to this, Sprint stock is also amongst the most shorted stocks at the moment.

 

Sprint will have negative 4 billions in free cash flow in fiscal 2015. By the end of 2016, 3 billions in debt is due. So for 2016, to avoid issuing more debt and or refinancing (they have to avoid both or else bk) these 3 billions debt, they need to generate 7 billions extra cash compared to 2015. The 2.5 billions cost reduction run rate, and probably 2 billions in device leasing vehicle reduce the cash requirement to 2.5 billions. To come up with this shortage, they will have to reduce capex from estimated 5 billions to 3 billions. JPMorgan already issued a report yesterday expecting reduction in capital expenditure. But relocating existing cell sites implies increase capex spending. That is why investors did not like that news on Friday because relocating sites will cost lots of cash, cause network disruptions and take years to accomplish. Hopefully the author mixed up future small cells (installed on public venues) development using wireless backhaul with cost cutting initiatives.  

Here is an article responding to the Friday recode's article. http://wirelessestimator.com/articles/2016/towercos-tank-after-radical-unconfirmed-report-of-government-competition/

It confirms everyone's impression that relocating sites are not easy task.  However, switching to wireless backhaul from fiber seems fairly straight forward.  I am not an engineer maybe someone else can charm in about this.  

So far this is as much as I can come up with:  500 millions from labor reduction, maybe about 100 to 200 millions in roaming costs.  But the rest of the 2.5 billions cost reduction, I have no idea where it will come from.

[JimBob]

The bleeding continues.  Sprint stock hitting new historic lows today ($2.78 as of this post).

 

I commend the Sprint executives and senior managers who are not panicking, assuming much of their stock-based compensation is depressed or worthless at these prices.

[sbolen]

The bleeding continues. Sprint stock hitting new historic lows today ($2.78 as of this post).

 

I commend the Sprint executives and senior managers who are not panicking, assuming much of their stock-based compensation is depressed or worthless at these prices.

I want to say, "nowhere to go but up!", but it went down further: $2.69

 

 

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[laqn1283]

The bleeding continues.  Sprint stock hitting new historic lows today ($2.78 as of this post).

 

I commend the Sprint executives and senior managers who are not panicking, assuming much of their stock-based compensation is depressed or worthless at these prices.

During market turmoil companies with high debts drop the most.  2016 is a cash crunch year but I believe marcelo and masa should be able to navigate thru it.  

Medium and long term outlooks are much more promising.  As data continue to grow, with its vast spectrum and industry leaning toward small cells, Sprint unlike other carriers can leverage its spectrum not only for data but also for wireless backhaul which can significantly reduce its operating expense compared to the other 3 carriers.  In addition, when you have an industry that has only 4 players, it is usually the one with the least expensive service dictate the outlook for that industry.  For the past 2 years or so, Tmobile had the cheapest wireless plans therefore they have had the highest postpaid adds in the mean time Sprint lost customers due to service disruptions and wireless plans which were as expensive as verizon and att.  Now Sprint offers some of the cheapest plans available.  And in a few months tmobile will need to spend a significant amount of cash for 600 spectrum which will increase its operating expense.  Eventually it will need to raise price and that indirectly benefits the other 3 carriers.

[JimBob]

Sprint's market cap is now $10 billion versus T-Mobile US' $30 billion. 

[markjcc]

Sprint's market cap is now $10 billion versus T-Mobile US' $30 billion. 

That spectrum portfolio Sprint has though $$$$

[sbolen]

That spectrum portfolio Sprint has though $$$$

They're basically worth more for the spectrum holdings than as a wireless operator.

 

 

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[luvixuha]

"It has to go up!" and "It has nowhere to go but up!" is a fallacy. The stock is a risky hold until their financials come out. Even then, consensus is negative EPS, and the street thinks they may even do worse by a penny or two, which isn't likely to make the stock go up. The stock is not likely to pop.

 

Sprint has an non-negligible risk of being delisted.

 

The telecom sector is up 0.15% today. The Dow and S&P are both up slightly. Verizon and AT&T are each up 1-1.5%.

T-Mobile is about even, and Goldman Sachs boosted their target price to $47/share today. (Personally I feel that T-Mobile is about a $40-42/share target.)

 

Sprint? Down 7.49% as of this writing.

Edited January 19, 2016 by luvixuha

[luvixuha]

For the past 2 years or so, Tmobile had the cheapest wireless plans therefore they have had the highest postpaid adds in the mean time Sprint lost customers due to service disruptions and wireless plans which were as expensive as verizon and att.  Now Sprint offers some of the cheapest plans available.

T-Mobile in 2011 into 2012/early 2013 had the cheapest plans in the industry, yet they were bleeding customers. Being the cheapest does not translate into market growth.

 

 

And in a few months tmobile will need to spend a significant amount of cash for 600 spectrum which will increase its operating expense. Eventually it will need to raise price and that indirectly benefits the other 3 carriers.

AT&T is going to be spending heavily in the auction, as is Verizon to a lesser extent. And Verizon is not playing in the same pool, the spectrum screen keeps T-Mobile from having to compete with big red in 95% of the country, and keeps AT&T from picking up reserved spectrum in virtually any urban area. T-Mobile is going to walk away with a solid pile of spectrum, and their spend (up to $10B) is not going to affect their ratings with their credit agencies.

Edited January 19, 2016 by luvixuha

[Ascertion]

What exactly would happen to the shareholders that hold S when/if the stock was de-listed from NYSE?  Is Softbank obligated to purchase the remaining shares for cheap?  Are the shares worthless?  Do the shares just become private?  Would Sprint benefit from doing a reverse stock split to keep the number over $2? 

[luvixuha]

What exactly would happen to the shareholders that hold S when/if the stock was de-listed from NYSE?  Is Softbank obligated to purchase the remaining shares for cheap?  Are the shares worthless?  Do the shares just become private?  Would Sprint benefit from doing a reverse stock split to keep the number over $2?

You'd still own the company unless they filed for bankruptcy. They could go OTC and just not be traded on NYSE anymore, or they could attempt to go private and buy you out (probably for a small premium over what the stock was last trading at).

[Ascertion]

You'd still own the company unless they filed for bankruptcy. They could go OTC and just not be traded on NYSE anymore, or they could attempt to go private and buy you out (probably for a small premium over what the stock was last trading at).

*Gulp*

[laqn1283]

T-Mobile in 2011 into 2012/early 2013 had the cheapest plans in the industry, yet they were bleeding customers. Being the cheapest does not translate into market growth.

 

 

 

AT&T is going to be spending heavily in the auction, as is Verizon to a lesser extent. And Verizon is not playing in the same pool, the spectrum screen keeps T-Mobile from having to compete with big red in 95% of the country, and keeps AT&T from picking up reserved spectrum in virtually any urban area. T-Mobile is going to walk away with a solid pile of spectrum, and their spend (up to $10B) is not going to affect their ratings with their credit agencies.

Yes it is true that back then Tmobile had the cheapest plans but still lost customers because their network was not up to par.  But since 2012 in major cities, Tmobile became as good as Verizon and Att but better than Sprint.  During that time, Sprint network deteriorated significantly and all these customers needed to find another carrier and Tmobile fitted their choice because of price and relative quality. Now fast forward to 2015, in major cities all 4 networks are very similar in performance so the real differential is mainly price.  A recent report by an investment also confirms this.  

Yes the 10 billions they spend probably will have 5% rate and that adds 500 millions dollars annual expense and they will not be able to use it until 2020.  

[spotmeterf64]

From a non-customer, non-S4GRU member perspective, Sprint is a ship taking on water about to sink.

 

Sprint has to improve much faster than it caught up, or something will force their hand. I wouldn't be surprised if Marcelo gets the boot this year, and SoftBank either goes all-in or starts scaling back their investment.

 

Sometimes it's useful to peel off the rose-colored glasses and see things for the way they really are. I don't see a way for Sprint to go much longer with the way the business has been going since Marcelo came on.

[EvanA]

From a non-customer, non-S4GRU member perspective, Sprint is a ship taking on water about to sink.

 

Sprint has to improve much faster than it caught up, or something will force their hand. I wouldn't be surprised if Marcelo gets the boot this year, and SoftBank either goes all-in or starts scaling back their investment.

 

Sometimes it's useful to peel off the rose-colored glasses and see things for the way they really are. I don't see a way for Sprint to go much longer with the way the business has been going since Marcelo came on.

What? Sprint has been better as a company since Marcelo took over. Churn is down to record lows for the company, postpaid phone net losses are decreasing every quarter, and the network is improving daily (just check RM's 2nd half reports). If Sprint reports good Q4 results and hopefully clears up the apparent confusion about their network strategy I think the stock will rebound a bit.

 

There's still a long way to go and how they will handle debt coming due over the next few years is a real concern, but they're certainly on a better track than they ever were under Hesse.

[markjcc]

What? Sprint has been better as a company since Marcelo took over. Churn is down to record lows for the company, postpaid phone net losses are decreasing every quarter, and the network is improving daily (just check RM's 2nd half reports). If Sprint reports good Q4 results and hopefully clears up the apparent confusion about their network strategy I think the stock will rebound a bit.

 

There's still a long way to go and how they will handle debt coming due over the next few years is a real concern, but they're certainly on a better track than they ever were under Hesse.

 

Sprint needs not only to beef up the network but also beef up the marketing, network as is already decent.. However marketing certainly is sinking. Like trying to open up a restaurant without any sort of advertising 

[Ascertion]

What a rough year for Sprint so far...stock has lost a 3rd of its value since the start of 2016...