Through The Fly's Eyes: Sprint-Nextel
from Theflyonthewall.com
Sprint's Gary Forsee Seeing More Pressure
Activist investor Ralph Whitworth of Relational Investors is increasing the heat on Sprint-Nextel (S).
As we have been blogging for a while, Sprint Nextel CEO Gary Forsee's plan to turn the wireless service provider around has not worked. Forsee, a year following its merger with Nextel, targeted EBITDA of around $20 billion, however, now sees 2007 EBITDA of around $11.3 billion. And this is in an industry where the number of competitors has decreased.
The results of Whitworth's activist-shareholder efforts have been somewhat mixed. His most high-profile effort, forcing change to Home Depot's (HD) management and board, has yet to prove rewarding for shareholders, as Home Depot's price is down since he took his activist stance.
What will Whitworth do? Hopefully, he will force Forsee out and force the sale of the company to Verizon (VZ). AT&T (T), which has combined the Cingular and AT&T Wireless businesses, is a huge competitor and is being well-managed. Sprint has fallen way behind its competitors and some serious changes are needed.
posted by Eric at
7:39 AM
4 Comments:
Sprint is too large to be bought by either ATT or Verizon. And the govt anti-trust would never allow it to happen due to anti-competitive reasons. One of the best options for this company is to be merged with a cable operator to provide a true quad-player to go head to head with Verizon and ATT new TV services.
By
Anonymous, at 9:03 AM
Sprint is a huge company. You can't change direction on a moments notice. It's like a ship. Give them time.
By
Anonymous, at 9:09 AM
Given some time and some strategy, anything is possible. NewsVisual posted an article today that shows the connections between the boards and executives of either company and quite a few people at Sprint and Verizon work together at other companies (see article: http://www.newsvisual.com/newsvisual/2007/10/sprint-and-veri.html ). It would be a pretty huge deal, but not out of the realm of possibility given some of the ties mentioned and Sprint's current state.
By
fbartol, at 10:16 AM
While it is true that Sprint is a huge company - that isn't the reason behind it's struggles, or it's failure to right itself.
The purchase of Nextel was a horrible mistake - the two companies had nothing in common (other than being mobile phone companies), had no technology in common (Sprint being CDMA, Nextel being iDEN), and let's face it - Nextel was at the end of it's line, and Sprint paid a huge premium on damaged goods.
Add to this Sprint's other troubles - it has the worse customer service I have ever experienced, and it's not hard to see why subscribers are leaving in droves. I went to AT&T, and I'm very happy with the move.
By
Anonymous, at 5:03 PM
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