Could a Sprint bankruptcy be a real possibility?
Sprint's been having a tough time lately. It's network capacity upgrades aren't cheap, and neither are its LTE upgrades. It still seems to be losing money each quarter, and it committed a lot of money to Apple for the privilege of carrying the iPhone. Ultimately, the question has got to be: how much is too much?
Wall Street analyst Craig Moffett has gone on the record to say that, in his opinion, Sprint's stock is hugely underperforming. He stated: "To be clear, we are not predicting a Sprint bankruptcy … We are merely acknowledging that it is a very legitimate risk. And notwithstanding a recent rally in Sprint shares, we believe that risk is rising."
He went on to predict that an upcoming LTE iPhone most likely won't work with Sprint's version of LTE, which will make Sprint's committment to sell the iPhone that much harder to meet. Additionally, Sprint's iPhone sales failed to meet CEO Dan Hesse's target last quarter, leaving many wondering how long Sprint can withstand this pressure.
To be clear, we at G&E are not saying that Sprint will go bankrupt, or even that it's a possibility at this point: this is one man's opinion, and analysts have been known to be wrong before. Still, if you are a Sprint fan, this can be kind of scary to think about.
We'd like to know: what should Sprint do to stay above water? Should Sprint move its focus away from the iPhone and back to phones like the HTC EVO? Should Sprint try to cancel its Apple deal, or will that end up hurting more than helping? Let us know what you think below.
[Bloomberg via Sprint Feed]
