dontgetfooledagain

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    • Fri Aug 15th 09:29 AM | Rating: 0 0
      Commented on:
      Dan Hesse, Sprint, and the Anatomy of Taking a CEO Job
      S employee:

      Dan Hesse, who I believe is a good man, finds himself in an untenable position; but, he can I believe, turn your ship around if he has enough time to enact his strategy, if it is executed properly and if the financial picture of the company can be rectified and held together long enough for him to meet his objectives.

      If you don't like where you are remember this; you live in America, where you can exercise the right to work wherever and for whomever you want. Instead of writing negative things about the company you work for, I would suggest that you seek another employer since it is apparent, that you are psychologically defeated and that is neither good for you, or the company you work for. You should do yourself and your employer a favor, and exercise the aforementioned right of employment that is afforded you by this great country we live in, and move on.

      IMHO S's financial picture is bleak. It WAS a result of the merger. My opinion is that GF, TD, MA and PS executed their short-term strategy and succeeded at the company's and shareholders' expense. That strategy was to:

      Lever Nxtl with no intention of ever paying down the debt, but to perform bond exchanges ad infinitum until a buyer could be found to foist the debt and company upon; put together a specious spectrum swap transition plan for iDEN that is now S's bane, have S pay way too much for Nxtl's assets and the cadre of execs would stay on board long enough so that all could be paid handsomely while exercising stock options of the combined company's 'watered stock', and then bail out multi-millionaires just before the write-down of massive Good-Will was reported, never to work again. That was it in a nutshell and it worked well for them but hurt a lot of people who trusted that they were in it for the long haul.

      Of course all have one thing in common. Cupidity and the knowledge to use OPM to garner control and power. People are predictably attracted to the money, and really don't care where it comes, ill-gotten or otherwise, as long as it is directed to them.

      This is of course my own opinion regarding your company's past and present situation. I do not and have never owned S stock nor do I or have I ever shorted it. This is simply an expression of my opinion based on anecdotal data dots that I have connected.

      Good luck with your job search.
      View article »
    • Thu Aug 14th 21:02 PM | Rating: 0 0
      Commented on:
      Dan Hesse, Sprint, and the Anatomy of Taking a CEO Job
      God speed Dan! You are a good man and deserve to succeed; however, your predecessors left you with a financial mess on your hands and that is probably what you couldn't tell anyone since it was not publicly known at that point. Saleh kept buying back stock and paying dividends when he should have been paying down debt. But, Saleh is from the cowboy school of finance, lever up the company, collect a nice fat pay check, and cash out once the company is sold, if it lasts that long. Their's was a risky short-term strategy that saddled Sprint with massive debt, dated iDEN network that needs to transition spectrum, and now execution problems in a slowing economy. You didn't deserve this but I believe you can turn it around if you can keep the financial side of the ship from listing and sinking you.

      God bless and good luck!
      View article »
    • Wed Aug 13th 08:58 AM | Rating: 0 0
      Commented on:
      WhatsTrading's Weekly Top 5 Options Ideas: Euro, Sprint, Freeport-McMoran, WaMu, GDX
      S calls, eyebrow raising? Sounds like someone had some insider information. Where is the SEC?
      View article »
    • Wed Aug 13th 08:25 AM | Rating: 0 0
      Commented on:
      Wireless Carriers: Sprint and T-Mobile
      IMHO: S results are relative, relative to their own performance and relative to their competition which is where I believe the focus should be. They compare their churn rate against their own measurement as opposed to an industry wide comparison. They are 100 basis points higher than the 2 leaders T/VZ. Hesse is right about churn being the single most important metric regarding company performance since a 2% churn rate translates into an 11% decline in sales. However, even if he gets the churn rate down to 1%, which I doubt he can accomplish without a severe drop in ARPU or an increase in phone subsidies, that would still translate into a ~5% drop in sales. The have already mined the high-end of the ARPU curve and will eventually deplete the number of customers who can afford $99/month. At their current sales run rate and their debt to EBITDA ratio climbing, they may be close to violating their debt covenants which would not bode well for the equity holders.

      Their revenue is declining at >11% y-o-y. Wireline is not a big contributor to gross margins and only comprises ~15% of gross sales revenue.

      Qwest leaving for VZ, Embarq leaving for unnamed carrier, Federal government GSA contracts lost, problems with the MVNO, a churn rate that when bi-annualized (assumes 2 year contracts) translates into a 24% defection rate. In order to grow the business they must run faster than 24% adds just to stay even. I don't see that happening.

      Again, IMHO, I might look at the bonds but certainly not the stock. I believe that the bonds have more upside than the stock should DH turn this ship around.

      One more thing: Leverage works both ways. Nxtl took advantage of high leverage when they were profitable and the stock popped as a result; but, leverage can also magnify and amplify losses. Just something to keep in mind. The time to buy highly leveraged, high beta stocks is in the beginning of an economic recovery. We are nowhere near that point yet. Just my humble opinion.
      View article »
    • Wed Aug 13th 08:08 AM | Rating: 0 0
      Commented on:
      Earnings Preview: Sprint Nextel Corporation
      Don't get your hopes up. If history is any guide, they return 4% on equity so, that should translate into $0.2/share in a good year. If I give them a PE of 20 (which I wouldn't since they haven't demonstrated that they can grow with the big boys) that would give them a share price of $4. But, since they have been shrinking rather than growing the top and bottom lines, I would give them a much lower PE ratio which of course would further depress the stock price.

      As Cramer aptly stated the other night; stocks that sell for less than $10 can cost you big time, and they are selling for less than $10 for a reason. A $1 move on a $10 stock is a 10% move. As the price declines, subsequent decrements are magnified in percentage terms.
      Most of the time 'fallen Angels' such as S are there due to poor management, culture clashes and poor execution in all functional areas. A good example of that would be Lucent before its merger with Alcatel and Alcatel Lucent after the merger. Mergers don't save bad companies.

      Another thing to look at is their debt to equity ratio and how many times they cover interest payments. Their bonds are rated junk. Therefore, I might take a stab at their bonds, but certainly not their stock.

      I am sure that many of you are S employees trying to hype the company and move the stock price in a northerly direction. My advice would be to go out and win new customers while taking care of your existing one's and stay off of these message boards. Let your actions and the financial fundamentals do your talking. So far, the results and performance of this company and its stock price is abysmal at best.

      My advice, go buy a cd...at least you'll sleep well.
      View article »
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