Through The Fly's Eyes: Sprint-Nextel
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.