The Five Dumbest Things on Wall Street This Week

3. Forsee's Unforeseen Problems

Sprint Nextel (S Quote) stumbled deeper into its merger-integration mess this week.

The Reston, Va., telecom giant said Tuesday that Chairman Tim Donahue will retire early. Donahue, 57, was CEO of fast-growing wireless telco Nextel until it and Sprint joined forces last year in a $35 billion merger of equals.

"I have poured my heart and soul into Sprint Nextel, and I am confident that the promise of the merger will be realized," said Donahue, who will step aside at year-end. "Instead of being in the thick of the action, it's time for me to start cheering Sprint Nextel along from the sidelines."

The sidelines are starting to get crowded at Sprint Nextel. Strategy chief Tom Kelly, another Nextel alumnus, retired in April. In August, operating chief Len Lauer -- long CEO Gary Forsee's right-hand man -- quit after an earnings warning.

The departures consolidate Forsee's control at Sprint. That's hardly a welcome development on Wall Street, which has been puzzled by the merged company's failure to build on Nextel's lucrative business-customer base. Shares of Sprint have fallen 20% since the much-hyped union was announced in December 2004, though some of that decline is attributable to a partial spinoff of the Embarq (EQ Quote) local phone operation.

"Over the next two-and-a-half months," Forsee reassured investors, "Tim and I will be working with the board and the management team to ensure a seamless transition."

If that fails, Forsee should soon be working on a transition of his own.

Dumb-o-Meter score: 85. "We're trying to accelerate the pace of our transition and improve operational execution," Sprint told the Washington Post back in August.