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Jul. 28, 2015, 5:47 PM
- Sprint (NYSE:S) closed today up 6.8% on heavier-than-average daily share volume, as buyers took advantage of yesterday's 52-week low.
- Today's move up cuts what were substantial losses for the shares over the past week -- now to -13.8% over the past five days.
- Yesterday, Strategy Analytics analyst Roger Lanctot pointed a finger at Sprint, as a famously (and frighteningly) hacked Jeep vehicle ran on Sprint's Velocity telematics platform. Lanctot suggested Fiat Chrysler was taking the fall for security that should have been implemented by Sprint at the network level.
- In a statement, Sprint says: "This matter was related to software in certain vehicles equipped with 8.4-inch touchscreens and not to Sprint, the carrier providing connectivity to the touchscreens ... At the automaker's direction, we provided assistance by developing and implementing a network-level measure to prevent unauthorized remote network access to the software in the touchscreens."
- A blog post from Sprint Chief Network Officer John Saw noted that "Sprint’s network is built to support an open Internet for its customers, developers and device manufacturers. By 'open' we mean that we do not block lawful Internet traffic or protocols. We do not restrict access to applications and content, nor do we prioritize one content provider’s traffic over another."
- The question for investors going forward is who will end up forced to shoulder more responsibility for security in an area as new as vehicle telematics -- and how much happens at the network level vs. the device level. Fiat Chrysler is implementing the fix via USB device rather than any over-the-air update.
- "We think Sprint's legal exposure is very low in the incidents," writes Elevation analyst Stephen Sweeney, "and not many investors were ascribing much value at all to begin with for Sprint's telematics business."
Jul. 27, 2015, 12:03 PM
- Sprint (S -8.5%) has the "dubious distinction" of being the first wireless carrier implicated in an automobile hack, says automotive analyst Roger Lanctot.
- Fiat Chrysler is taking the fall, he writes, for "Sprint’s failure to properly secure its network and the Jeep in question – which was subjected to some comical and terrifying remote control in real-time on the highway thanks to an IP address vulnerability."
- The hack is bad news for Fiat Chrysler, he notes, as the company deals with a record fine over safety practices -- but it might also mean a "fatal" blow for Sprint's Velocity telematics platform.
- Sprint's looking to sell Velocity, he says, which might be seen as damaged goods after a very damaging story.
- Previously: Hacking demo leads to recall of 1.4M Fiat Chrysler vehicles (Jul. 24 2015)
Jul. 24, 2015, 1:58 PM
- A measured slide during the day has brought Sprint (NYSE:S) shares down 8.6%, to $3.36. The stock is the biggest decliner among telecoms.
- Jefferies yesterday cut its price target to $3 on worries about the company's cash position and spending.
- Short interest has been building in the stock -- from about 62M shares short in March to more than 103M shares short at June's end, almost 13% of float.
- AT&T and Verizon reported earnings this week; T-Mobile follows on July 30 and Sprint on Aug. 5.
- Formal FCC approval of AT&T's $49B purchase of DirecTV is expected today.
Jul. 23, 2015, 10:09 AM
- Sprint (NYSE:S) is down 1.8% as Jefferies' Mike McCormack cuts the firm's price target on the shares to $3, from $4, with cash burn worries back at the fore: "Industry-high leverage, negative FCF generation" and even the need to take part in the broadcast incentive spectrum auction.
- Jefferies maintains an Underperform rating. Shares closed yesterday at $3.81 and are currently trading at $3.76.
- Lease plan accounting may be papering over cash issues, McCormack writes: "After adjusting for secondary channel capitalized handset costs, we estimate that Sprint will use nearly ~$1.1bn of cash before capital expenditures in FY15."
- The carrier's guidance calls for full-year EBITDA growth of 12%, but adjusting for lease plan accounting, it may be more like an 18% decline, he says.
- On the technical side, Sprint's network densification project looks like a "stop-gap measure" and Sprint will need to look at additional low-band or mid-band spectrum.
Jul. 16, 2015, 3:57 PM
- Sprint (NYSE:S) has jumped this hour, up 3.7%, on talk that a discussed merger between Dish Network and T-Mobile (NYSE:TMUS) is stalling out on concerns about valuation and structure, Bloomberg is saying.
- A plan to merge Sprint and T-Mobile had faded last year on regulatory concerns, and since then T-Mobile has been linked to a number of players in the industry.
- Many Sprint investors are calling for a new look at a Sprint/T-Mobile merger, considering the gap between the two and U.S. industry leaders AT&T and Verizon.
- Previously: Dish slips 3%: FCC set to reject discounts, T-Mobile merger stalling (Jul. 16 2015)
- Previously: T-Mobile and Dish Network: Other options, other suitors (Jun. 12 2015)
Jul. 14, 2015, 3:09 PM
- Sprint (NYSE:S) is coming off yesterday's 52-week low, up 8% and back to $4.00, its strongest point of the day. The stock is pacing gainers in telecom.
- The carrier has expanded its house-call "Direct 2 You" service to Dallas; Washington, D.C.; Detroit; and Tampa, as well as surrounding areas. So far, so good with a service that must be costly to provide; Sprint says it will keep adding cities throughout the year.
- Meanwhile, its prepaid unit Boost Mobile has rolled out its first Wi-Fi hotspot plans with a $50 Netgear device meant to be paired with no-contract payments of $25/month for 1.5 gigabytes of 4G data, or $50/month for 10 gigabytes.
Jul. 10, 2015, 2:43 PM
- Sprint (NYSE:S) is down 2.2%, and T-Mobile (NYSE:TMUS) up 0.6%, as Stifel Nicolaus launches new coverage on the U.S. wireless sector and rates both stocks at Hold.
- Analyst John Karidis says T-Mobile faces uncertainty in acquiring low-band spectrum (and the company has been vocal about pressing for bigger airwave reserves in the upcoming broadcast incentive auction), and a threat from the bigger carriers pushing for mobile video service.
- In the case of Sprint, though, he lacks confidence the firm can increase its value regardless of its relative spectrum wealth, and that it's "markedly tougher" to forecast free cash flow because of the difficulty of figuring profit and cash timing. He does note minority shareholders "are too battle hardened to give up on the stock at this price."
- Sprint is trading today at $3.82 after hitting a 52-week low of $3.74; T-Mobile is at $39.01, off a 52-week high of $40.77.
Jul. 9, 2015, 9:40 AM
- T-Mobile (TMUS +2.6%) says it gained 2.1M customers last quarter as it pushes to overtake Sprint (NYSE:S) as the country's third-largest wireless carrier.
- The adds brought T-Mobile to 58.9M users. Early figures suggest that branded new monthly phone users were 760K.
- The carrier also said it was adding Canada and Mexico to its roaming plan, calling its Simple Choice the "first and only wireless plan to span an entire continent" -- a tweak at AT&T (T +0.5%) and its ambitions for a U.S.-Mexico zone.
- Previously: Sprint's Claure to T-Mobile's Legere: Tired of 'Uncarrier bullshit' (Jul. 02 2015)
Jul. 8, 2015, 7:25 PM
- On a down day for U.S. markets at large and the sector in particular, Sprint (NYSE:S) still led telecom decliners, -8.3% (its biggest one-day drop in eight months) on a day where NYSE trading was interrupted for more than three hours.
- Analyst Craig Moffett thinks the government may take a different stance than it did before on a merger between Sprint and T-Mobile (NYSE:TMUS) -- if Sprint "really is in severe financial distress, as we think they will be within a relatively short period of time."
- A Sprint/T-Mobile tie-up, though, wouldn't happen until after the next presidential election, if at all, he said.
- Asked about merger talk between T-Mobile and Dish Network (NASDAQ:DISH), meanwhile, Moffett thinks that's "unlikely" and "not about the business synergy between two businesses."
- "Although it was touted as Dish buying T-Mobile, it would really be T-Mobile buying Dish's spectrum through a complicated transaction."
- This spring, Moffett has pointed to cash burn in saying that if T-Mobile goes to another acquirer, "Sprint's in a world of hurt" and running out of good options. "At the current rate of cash burn, the company will run out of cash in a year."
- Previously: T-Mobile and Dish Network: Other options, other suitors (Jun. 12 2015)
Jul. 6, 2015, 2:46 PM
- Network spending at Sprint (S -3.4%) is "slowing down materially," but is expected to ramp up again later this year and beyond as a major new phase of network "densification" begins, Jefferies writes in a new note.
- Sprint's "Next Generation Network" got approval from parent SoftBank (OTCPK:SFTBY) in June, but vendor selection and other details are still ongoing. Analysts see the project leaning heavily on small cells as Sprint seeks a dramatic improvement in speed and performance.
- With the company's overlay work on 800 MHz and 2.5 GHz slowing, "we expect that Sprint's business trends might look slower for the vendors of late," Jefferies says.
- The firm says carriers' network spending overall is a bit slower and it wouldn't be surprised if Q/Q improvement in spending trends tracked below seasonal norms.
- Previously: Report: Sprint CTO resigns in middle of network buildout (Jun. 23 2015)
- Previously: Sprint CEO: We'll have best or second-best network in two years (May. 27 2015)
- Previously: Sprint: Amid network investment, cash burn back in focus (May. 06 2015)
Jun. 30, 2015, 9:48 AM
- U.S. wireless firms are all trading higher out of the open as RBC Capital raises price targets on AT&T (T +0.2%), T-Mobile (TMUS +1.3%) and Sprint (S +1.1%).
- Verizon (VZ +0.2%) is also up comparably with AT&T.
- The firm's best rating of the three goes to T-Mobile, with an Outperform. RBC raised its price target to $41; it's currently trading at $39.17.
- AT&T gets a Sector Perform rating and a raised price target of $37 (currently trading at $35.83), and Sprint gets a Sector Perform and a higher target of $6 (currently at $4.56).
Jun. 4, 2015, 10:40 AM
- Dish Network (DISH +5.9%) and T-Mobile (TMUS +4.6%) are on the rise this morning -- and Sprint (NYSE:S) is down 4.2% -- in the wake of reports that Dish and T-Mobile are talking merger.
- It's not the first time the two have been linked by observers due to strategic sense: T-Mobile needs spectrum and Dish Network has it, and Dish needs growth and broadband service that T-Mobile could provide as AT&T and DirecTV near the closing of their merger. (Though the broadband isn't a perfect fit.)
- T-Mobile has been amassing wireless spectrum, and while Dish's Charlie Ergen has been circumspect as recently as this week about what the company would do with it, one thing he's made clear is that the company didn't plan to start a wireless network from scratch.
- A deal may take some time in coming, in part because of its size -- both companies have $30B-plus market caps -- and the fact that the FCC prohibits strategic talks during spectrum auctions, leaving a window before the broadcast incentive auction for discussions.
- Sprint, meanwhile, is trading down on fears that it could be left out in the cold, having a potential merger with T-Mobile dematerialize last year, and subscriber momentum that is likely to see it passed by T-Mo to fall to the fourth-largest carrier in the U.S., with a cash burn problem to boot.
Jun. 4, 2015, 9:14 AM
Jun. 2, 2015, 6:46 PM
- Mogul John Malone floated an interesting idea today: Forget Sprint and T-Mobile -- the wireless industry could get its third major alternative to Verizon and AT&T (NYSE:T) with the merger of Charter Communications (CHTR -1.6%) and Time Warner Cable (TWC -0.9%).
- Malone was speaking at his various Liberty companies' annual meetings and noted that in 2012, the cable consortium SpectrumCo got an option to participate in a wireless MVNO service with Verizon (NYSE:VZ) after the wireless firm bought $3.9B in frequencies.
- Charter wasn't in SpectrumCo then, but merger partners TWC and Bright House are. “The concept that Comcast, a greatly enlarged Charter and Cox could together offer a WiFi-optimized connectivity service with a default to a Verizon MVNO is an interesting concept," Malone said.
- He thinks "there's very little dirty underwear" left to be found in a regulatory review of Charter-TWC after the past year's scrutiny.
- Also of interest regarding Charter capex and the dividend: “Everybody's going to say, ‘Oh he’s spending too much capital,’ but I think the end result with be worth it ... To a large degree we’re betting on Tom Rutledge and his team to wake up a sleepy cable company that was treading water in all honesty for a while and trying to satisfy shareholder pressures with buybacks and dividends as opposed to putting the money into having a competitive service offering.”
- Malone company shares today: LMCA -0.1%; LMCB flat; LMCK flat; LTRPA -0.9%; LTRPB +2.2%; QVCA +0.8%; LBRDA +0.1%; OTCQB:LBRDB flat; LBRDK -0.1%.
May 6, 2015, 7:44 PM
- Sprint (NYSE:S) fell 3% today following a quarter where it reported turnaround still in progress, and just as its No. 1 challenge became clear over the past several month -- upgrade its network to keep up with giants AT&T and Verizon, and hold off T-Mobile -- its cash burn is back in focus, as asset investments aren't cheap.
- Citigroup's Michael Rollins says that Sprint will burn free cash flow of around $6.1B in 2015. And analyst Craig Moffett notes the company last quarter burned through $914M of its $3.5B cash-and-marketable-securities total; "At this rate, Sprint will run out of money around the 2016 (radio spectrum) incentive auction."
- For those looking for a white knight, majority owner SoftBank (OTCPK:SFTBY) has more than $90B of its own debt to worry about. And Barclays pointed out that while cash burn is improving, visibility for Sprint's turnaround "remains elusive."
- In Sprint's earnings call, CFO Joseph Euteneuer was placid: "We're very comfortable with the liquidity here in the short-term, and as I said it will ultimately ... we'll look at two things. One, the continued growth of the business, and two, the final outcome of what we're going to do on a capital standpoint."
Apr. 30, 2015, 11:55 AM
- Sprint (S -2.6%) has reached a deal to give its customers access to Boingo Wireless' Wi-Fi networks in 35 U.S. airports, including in New York, Los Angeles, Chicago, Dallas, Charlotte and others.
- Phones will automatically connect and Wi-Fi calling will be available when connected, Sprint says.
- The telecom is also offering customers a free consumer router that prioritizes Sprint's Wi-Fi calls over other network traffic, as well as working on an outdoor small cell that incorporates Wi-Fi
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