SPRINTing To Bankruptcy

Let's face it, Sprint is in big trouble. They recently disclosed they expect to need to access the capital markets, having decided to ditch their (foolish) reliance on WiMax in favor of LTE. They're losing customers. Their stock price is in total meltdown; after spiking to $3.39 Friday on the iPhone announcement it is now trading at $2.10,

a nearly 40% loss in less than 48 hours

and a loss of almost 70% from the high of $6.45 just a couple of months ago . And today their already-junk credit rating was placed on negative review.

Either Sprint breaks the model that the telecommunications companies have followed in the wireless space, literally pretty much right now, or they're dead within the next 12-18 months. Wireless phone service is a highly-capital intensive business (much like the ISP business of the 90s) and you literally bet the company on each iteration. Sprint may survive one bad decision (WiMax) but it will not survive two. We're talking about a company hanging on its fingernails right now staring down the need for major capital expenditures over the next 24 months and no ability to fund them from base operating revenue. In no particular order any of the below events will kill them - not all of these events, any one:....Read the full analysis here.

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