Bankruptcy is off the table for Sprint
After assigning a 50% likelihood in March that Sprint would end up in bankruptcy as it raced to build a national wireless network to handle smartphones like the iPhone 5 and compete with stronger carriers -- and citing bond trading prices -- telecom sector bear Craig Moffett of Bernstein Research now says that readily available financing makes that prospect remote. However, amid a 100%-plus stock rise for Sprint in 2012, Moffett says that even if bankruptcy is not a near-term risk for Sprint shareholders, significant risks remain.
Overland Park, Kan.-based Sprint's fortunes will rise or fall depending on how it handles Apple's newest smartphone, the iPhone 5, argues Moffett in a Sept. 27 research note.
In a best case scenario, the company's unlimited data plans may appeal to data-hungry iPhone users and the continued rollout of its upgraded national LTE network will ably handle surging network loads.
He maintains a bearish view on the company, though, questioning whether Sprint's network can handle iPhone 5 data loads or whether profit margins can be maintained.