Sprint’s stock hits new 52-week low as analysts cite ‘severe financial distress’
Sprint may be showing some improved operational trends, but investor concern over the carrier’s performance trajectory has tanked its share price.
Sprint’s stock price (S) has plunged more than 12% since last Wednesday, hitting a new 52-week low of $3.74 at one point last Friday. The drop came as one analyst noted the carrier could soon be in “severe financial distress” that could once again promote a potential merger with T-Mobile US.
Speaking on CNBC last week, MoffettNathanson’s Craig Moffett said Sprint’s current financial picture could open the door for a more favorable regulatory view on the combination of the market’s No. 3 and No. 4 mobile operators, according to Bloomberg Business.
“If Sprint really is in severe financial distress, as we think they will be within a relatively short period of time, then it’s possible that the government would look at that deal differently,” Moffett said. “But no guarantees.”
Sprint has been throwing billions of dollars at bolstering its network in an attempt to battle rivals. However, some of those efforts resulted in a subpar network experience for customers that resulted in mass defections, and job losses for Sprint’s rank-and-file and executives. Sprint’s leadership has recently garnered approval from majority stakeholder Softbank to again invest more into its network in an attempt to iron out the kinks.
Despite the past troubles, Sprint has touted improved network performance from independent firms like Root Metrics, which in some markets has ranked Sprint as the top performing network. Sprint has also slowly begun to turn around the connection defections, though so far most of that has come on the back of lower-value connections like tablets and resale partners.
Softbank Chairman Masayoshi Son early last year made a play to combine Sprint and T-Mobile US, but ran into regulatory hurdles that eventually cut short an official offer. Son eventually brought in new leadership at Sprint in the form of Marcelo Claure as well as a new focus to improve the carrier’s performance from within.
However, with Sprint continuing to struggle operationally, and now with investors further questioning Sprint’s direction, Son may be forced yet again to try a new tack for Sprint.
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