Top Executive Keith Cowan to Leave Sprint
Wireless communications company Sprint Nextel (NYSE: S) announced Thursday that its top M&A executive Keith Cowan will be leaving the company on September 30.
Cowan, who held the title of head of strategic planning for Sprint, was known for a tough deal-making style and was well capable of upsetting a few people of Wall Street.
A Sprint spokesman told the Wall Street Journal that Cowan is leaving Sprint to pursue civic and charitable obligations in his hometown of Atlanta and his college town of Chapel Hill, N.C. "We are getting excellent shareholder support as we go through the turnaround, and Keith's departure is not related to third-party concerns," the spokesman said.
Sprint has struggled of late against heavy competition from the likes of AT&T (NYSE: T) and Verizon Wireless (NYSE: VZ). Still, Sprint beat analyst estimates the past four quarters, notably in its first-quarter 2012 announcement as the company reported a net loss of $863 million and diluted EPS loss of $-0.29 versus consensus of $-0.42, earning an over 30 percent earnings surprise.
Benzinga reported in July that Sprint's historically positive stance toward mobile virtual network operators (MVNO) as a third-party services provider that - as a third party - does not itself own the wireless network or radio frequency provided that sets it apart from other providers. All three providers do operate MVNOs to some extent, including Verizon and AT&T's agreement with TracFone.
In addition, Sprint announced in June that the company no longer held a majority stake in subsidiary Clearwire (NASDAQ: CLWR) following Clearwire's recent stock issuance. Although Clearwire has been working with Sprint Nextel in 4G network development and Sprint remains Clearwire's largest shareholder, Sprint Nextel did not buy into the latest round.
Sprint reduced its voting shares in Clearwire below 50 percent in 2011 to avoid "any risk of a default trigger" on Sprint's own debt.
"Because of recent equity that Clearwire issued, Sprint said its economic interest has declined to below 50 percent, giving it leeway to make its voting interest in-line with its economic interest in Clearwire: 'Now that our economic interest has fallen below 50 percent, we are reclaiming our full voting rights so that our voting rights and economic rights are once again aligned," Sprint spokesman Scott Sloat said.
Cowan's departure is further evidence that Sprint is not afraid to evolve and make changes in an effort to improve during this difficult time for the company.
On Thursday, Sprint Nextel traded flat at about $4.60.
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