UPDATE: Oppenheimer Holdings Downgrades Leap Wireless International to Perform

In a report published Friday, Oppenheimer Holdings downgraded its rating on Leap Wireless International

from Outperform to Perform. Oppenheimer Holdings noted, “After more closely assessing the industry implications of a Sprint/Softbank/Clearwire merger, we are downgrading LEAP from Outperform to Perform. We believe Softbank's strategy is to use CLWR and most likely DISH's massive spectrum capacity to roll out a high-capacity mobile network to support differentiated applications to stabilize share and grow ARPU. If this is the case, this lessens the need to buy LEAP over the next 18 months. Furthermore, since our Oct. 11th report upgrading LEAP (at $5.90) and downgrading PCS (at $12.04), the valuation discrepancy has widened, with LEAP outperforming by 30%. We also think CLWR gets $3.25 a share at most; it looks unlikely for shareholders to get more than that given their leverage is limited. Please see Exhibit 1 for a summary of our LEAP rating and estimate changes; we've also attached our updated LEAP model.” Leap Wireless International closed on Thursday at $6.75.