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Bernstein Downgrades Sprint, Notes Bankruptcy Risk; Shares Fall


Duffman
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From WSJ

 

http://online.wsj.com/article/BT-CO-20120319-707703.html

 

NEW YORK (Dow Jones)--Sprint Nextel Corp. (S) shares fell premarket after the research firm Sanford C. Bernstein called a bankruptcy filing "a very legitimate risk" in downgrading the wireless carrier to underperfrom.

 

Sprint spokesman Scott Sloat said the company had no comment. Sprint shares fell 4.5% to 2.76 premarket.

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yeah just saw this on cnbc....

http://www.cnbc.com/id/46782626

 

wtf...though there are some valid points to be made there....

 

...i

n 2015, Sprint has $2.6 billion in debt maturities due, while Clearwire, which is

majority owned by Sprint

, faces an additional $3 billion coming due in the same year....

 

Also I dont really understand this logic here below...

...

A next generation LTE iPhone poses new and larger risks for Sprint, because the company does not have sufficient free-and-clear spectrum to launch a competitive LTE network and lacks the money to clear spectrum that is already being used, Bernstein said...

 

Is he just saying that b/c Verizon is using 10x10 LTE and Sprint is using 5x5 LTE that it doesn't have enough...completely discounting Clearwire's spectrum that it will be using in near future...?

Also the "...lacks the money to clear spectrum that is already being used..." comment....that referring to the 800MHz part or is there some other spectrum he is referring to???

I can't imagine it'd be about the 800MHz as that + the 5x5 at 1900 together dont add up to the 10x10 Verizon is using...

Edited by Sgt. Slaughter
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He may be speaking to the fact that AT&T is announcing markets left and right whereas Sprint has not officially announced much of anything. If it wasn't for S4GRU.com, there would be virtually nothing out there on how Sprint is doing, there would be no dates for devices, and they would look like they were floundering.

 

I think Sprint stock will tumble for now, then once they start announcing completion of markets, it will come back up. This downgrade is not good in the short-term for cash flow. Hopefully Hesse has a rabbit to pull out of his hat because investers may start calling for his head if this continues.

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I'm pretty mad at Craig Moffett right now. I'm still trying to earn all my trading fees right now, and he just ruined it for me.

 

You're in for the long haul now huh? If they can make it through NV, I think your investment is sound.

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You're in for the long haul now huh? If they can make it through NV, I think your investment is sound.

 

They will make it through NV. It's hoping that Clearwire makes it through their LTE upgrades. Of course, now with NetZero launching their own 4G network using Clearwire's WiMax, I think they will have a fighting chance. I'm just hoping that Clearwire will eventually expand after they upgrade to LTE.

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Clearwire needs to cut the cord with Sprint a little. As you said, they need to expand. If they build out a large network, they will attract customers, but they need capital to expand, and they need investors for capital...

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Guys...

 

Duffman's top post in this thread quotes the full text of an article from behind the WSJ paywall. That is a big no no and could get Robert hit with a copyright violation lawsuit, which would likely mean the end of S4GRU.

 

Robert cannot realistically follow every single thread, but we certainly do not want to get him in hot water, nor lose our favorite online hangout. So, please know the posting guidelines (linked below) and help remind each other to follow the guidelines.

 

http://s4gru.com/ind...de-websites-r26

 

AJ

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Guys...

 

Duffman's top post in this thread quotes the full text of an article from behind the WSJ paywall. That is a big no no and could get Robert hit with a copyright violation lawsuit, which would likely mean the end of S4GRU.

 

Robert cannot realistically follow every single thread, but we certainly do not want to get him in hot water, nor lose our favorite online hangout. So, please know the posting guidelines (linked below) and help remind each other to follow the guidelines.

 

http://s4gru.com/ind...de-websites-r26

 

AJ

 

Nice catch, I saw a similar article on yahoo so I didn't even pay attention to the initial quote.

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I went to the article on WSJ and there is a hilarious comment of a guy ripping Moffet apart

 

Rob Lopez Wrote:

Every time Sprint make sometype of improvement, there is always a P.O.S. AT&T loving analyist from some firm that feel that over the weekend, they had to rubbed their magic genie lamp and now they have all of the answers. Well, Mr. Moffett, it's kind of amazing how you can spew out your wonderful analytical BS while hidding your opinion under the umbrella of freedom of the press. There should be sometype of clause within the umbrella that holds you to sometype of accountability for making damaging remarks. Maybe with any luck, the company that you work for will take a second look at how you have tainted the name of Bernstein. With any luck, you too will be in the bread line.

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I went to the article on WSJ and there is a hilarious comment of a guy ripping Moffet apart

 

The problem is that the stock analysts can grow so influential that their prophecies become self fulfilling.

 

To illustrate, I'm Mr. Big Time Stock Analyst. I say that company X's stock price is going to fall. People hear that, get worried, and sell their shares in company X. Hence, company X's stock price does fall. Psychological manipulation of markets. What is worse is that I could have a short position in company X's stock, hence stand to gain from a drop in its stock price.

 

And that is one reason why I hold the stock market in very low regard. It has become arguably the biggest sham in an already highly imperfect capitalist system.

 

AJ

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haha thats pretty funny there...

 

Though I still wanna know what he could mean about Sprint not having enough "...

free-and-clear spectrum to launch a competitive LTE network and lacks the money to clear spectrum that is already being used,..."

When he says this I assume he negates Clearwires LTE deployment which is silly to neglect when you use Clearwire's debt maturity as a negative for Sprint earlier in the article...

Though the fact that there is so much debt maturity in 2015, that does pose a bit of a hurdle for sprint as I can't see them improving their financials enough to pay that by then with NV going on now and them paying for that...

 

But I think I remember Dan or someone already commenting on these and how they plan to handle them....or am i confusing that with one of the other financial things ive had in front of me in the past?...

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The problem is that the stock analysts can grow so influential that their prophecies become self fulfilling.

 

To illustrate, I'm Mr. Big Time Stock Analyst. I say that company X's stock price is going to fall. People hear that, get worried, and sell their shares in company X. Hence, company X's stock price does fall. Psychological manipulation of markets. What is worse is that I could have a short position in company X's stock, hence stand to gain from a drop in its stock price.

 

And that is one reason why I hold the stock market in very low regard. It has become arguably the biggest sham in an already highly imperfect capitalist system.

 

AJ

 

agree to an extent here!

 

It's comical how much some particular people can swing their word around and move stock prices in GIANT %'s....

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The problem is that the stock analysts can grow so influential that their prophecies become self fulfilling.

 

To illustrate, I'm Mr. Big Time Stock Analyst. I say that company X's stock price is going to fall. People hear that, get worried, and sell their shares in company X. Hence, company X's stock price does fall. Psychological manipulation of markets. What is worse is that I could have a short position in company X's stock, hence stand to gain from a drop in its stock price.

 

And that is one reason why I hold the stock market in very low regard. It has become arguably the biggest sham in an already highly imperfect capitalist system.

 

AJ

 

Couldn't agree more. There was some analysis that Sprint could revisit the MetroPCS deal if their stock price went up, that opportunity is less likely to happen now. Sprint stock hasn't dropped too far though, about 6% currently. It's a shame that someone with very little insight can manipulate stock like this. Sprint is being aggressive, they know that they need to be aggressive to compete, and they didn't need bankruptcy to learn that lesson. Now if Clearwire would get more aggressive instead of relying on Sprint handouts.

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The problem is that the stock analysts can grow so influential that their prophecies become self fulfilling.

 

To illustrate, I'm Mr. Big Time Stock Analyst. I say that company X's stock price is going to fall. People hear that, get worried, and sell their shares in company X. Hence, company X's stock price does fall. Psychological manipulation of markets. What is worse is that I could have a short position in company X's stock, hence stand to gain from a drop in its stock price.

 

And that is one reason why I hold the stock market in very low regard. It has become arguably the biggest sham in an already highly imperfect capitalist system.

 

AJ

 

Sort of interesting because the Wells Fargo analyst recommended Sprint and the stock shot up. Nobody on S4GRU was complaining then, lol. Goes both ways.

 

Regardless, one persons opinion doesn't set the price of the stock. It seems like many analysts are waiting to see if sprint can deliver on network vision and have a network that is competitive and reduce operating expenses.

 

Sprint won't get credit until they actually show results. So far, it's just been a lot of talk, so lots of speculation, so lots of stock price volatility.

 

Annoying? Yes (when you disagree with what he is saying).

 

Market manipulation? No.

 

There are analysts out there saying you should sell apple, yet the stock price isn't going down...

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Guys...

 

Duffman's top post in this thread quotes the full text of an article from behind the WSJ paywall. That is a big no no and could get Robert hit with a copyright violation lawsuit' date=' which would likely mean the end of S4GRU.

 

Robert cannot realistically follow every single thread, but we certainly do not want to get him in hot water, nor lose our favorite online hangout. So, please know the posting guidelines (linked below) and help remind each other to follow the guidelines.

 

http://s4gru.com/ind...de-websites-r26

 

AJ

 

It was not behind a paywall when I cut and pasted. I have trimmed it. Please PM me next time rather than posting publicly so that I am notified of my error in a timely manner. I do not follow every thread either.

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Sort of interesting because the Wells Fargo analyst recommended Sprint and the stock shot up. Nobody on S4GRU was complaining then, lol. Goes both ways.

 

Regardless, one persons opinion doesn't set the price of the stock. It seems like many analysts are waiting to see if sprint can deliver on network vision and have a network that is competitive and reduce operating expenses.

 

Sprint won't get credit until they actually show results. So far, it's just been a lot of talk, so lots of speculation, so lots of stock price volatility.

 

Annoying? Yes (when you disagree with what he is saying).

 

Market manipulation? No.

 

There are analysts out there saying you should sell apple, yet the stock price isn't going down...

 

Selling it and shorting it are totally different things...Selling it is what any smart investor would do. A stock that has made this kind of run over time you have to book some of the $ at least...pigs get slaughtered...

 

But I've worked enough in the stock market to know that while one person's opinion might not SET the price of a stock, it VERY well can MOVE it to exaggerated %'s....With the amount of day trading and HFT volume in the market everyone is listening to opinions of the "well known/respected" wall street'ers to an extent...

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Selling it and shorting it are totally different things...Selling it is what any smart investor would do. A stock that has made this kind of run over time you have to book some of the $ at least...pigs get slaughtered...

 

But I've worked enough in the stock market to know that while one person's opinion might not SET the price of a stock, it VERY well can MOVE it to exaggerated %'s....With the amount of day trading and HFT volume in the market everyone is listening to opinions of the "well known/respected" wall street'ers to an extent...

 

You can leverage a bet in any direction.

 

Anyway, anyone that follows sprint would realize this guy is a ding dong.

 

A next generation LTE iPhone poses new and larger risks for Sprint, because the company does not have sufficient free-and-clear spectrum to launch a competitive LTE network and lacks the money to clear spectrum that is already being used, Bernstein said...

 

That's just sad. The guy should be ashamed he lacks a basic understanding of Sprint's spectrum position and current spectrum plan/play.

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It was not behind a paywall when I cut and pasted. I have trimmed it. Please PM me next time rather than posting publicly so that I am notified of my error in a timely manner. I do not follow every thread either.

 

Just to be clear, my post was not meant to call you out, Duffman. Rather, I intended it more as a PSA for all members to know the quoting guidelines and to help each other keep a mindful eye on posts that might unintentionally deviate from those guidelines.

 

AJ

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You can leverage a bet in any direction.

 

Anyway, anyone that follows sprint would realize this guy is a ding dong.

 

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That's just sad. The guy should be ashamed he lacks a basic understanding of Sprint's spectrum position and current spectrum plan/play.

 

like i said earlier im still trying to figure out wtf he meant by that line there...lol

almost enough i might fire off an email asking wtf

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Just to be clear, my post was not meant to call you out, Duffman. Rather, I intended it more as a PSA for all members to know the quoting guidelines and to help each other keep a mindful eye on posts that might unintentionally deviate from those guidelines.

 

AJ

 

And knowing is half the battle -G.I. Joe

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like i said earlier im still trying to figure out wtf he meant by that line there...lol

almost enough i might fire off an email asking wtf

 

Eh, don't waste your time. No point in trying to figure out stupidity. The guy obviously lacks a basic understanding of what Sprint is doing with their specturm. If you asked him what the "G block" was he would probably look at you funny.

 

Ask him if he thought Sprint was going to buy the "H block" he would look even more confused. And that's without even leaving the PCS band! ha.

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Sort of interesting because the Wells Fargo analyst recommended Sprint and the stock shot up. Nobody on S4GRU was complaining then, lol. Goes both ways.

 

I cannot speak for others, but my reaction to Moffet's comments has little to do with the positive/negative tenor of his assessment (though I do agree with others that Moffet needs to bone up on Sprint spectrum analysis before he spouts off).

 

More generally, I just think that human, psychological elements (e.g. woefully imperfect information) render the stock market an irreparably flawed system.

 

AJ

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I'm sorry if I'm upset, and it's not just from an investment view. I'm upset as a Sprint customer this man is trying to put Sprint into a category that they shouldn't fall in. They are doing everything they can to survive in the wireless wars, but his partiality is to another carrier, and he must be bitter that at&t didn't buy T-Mobile, so he's downplaying Sprint to eliminate them from the Battle of the Carriers.

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