Is Sprint Corporation a Buy?
Spoiler alert: There's no sensible reason to own this struggling telecom's stock anymore.
Nationwide telecom Sprint (NYSE: S) has been on fire recently. The stock has gained 12% over the last three months and managed to hold steady in the last four weeks, handily beating the broader market in both cases.
That doesn't necessarily mean Sprint is on a long-term roll. In fact, the stock is not likely to keep growing from this plateau. Sector rival T-Mobile USA (NASDAQ: TMUS) is merging with Sprint in a blockbuster deal, leaving little room for further improvement.
The stock-swap merger proposal involves giving current Sprint owners 0.10256 T-Mobile shares for each of their Sprint stubs. Flipping the math around, it takes 9.75 Sprint shares to generate a single T-Mobile share. The implied total enterprise value of this theoretical beast was approximately $146 billion on the day of the announcement. After some wild swings over the summer, both stocks are back to where they were six months ago, so not much has changed.
(@)[email protected] (Anders Bylund)
Published on 17 Oct 2018 at 02:39PM