The Five Dumbest Things on Wall Street This Week
The 5 Dumbest Things on Wall Street: May 9
05/09/08 - 07:01 AM EDT
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4. Sprint to the Finish Sprint Nextel S shareholders have suffered mightily since Sprint's ill-fated decision to pay $35 billion to buy Nextel in 2005. The company has lost over half its value since the deal was consummated, and it has lost roughly 1.2 million subscribers amid outrageously bad customer service and a pathetic lack of integration between the two businesses. It recently wrote off most of the $35 billion investment in Nextel as an outright loss. Luckily, The Wall Street Journal reports that Deutsche Telekom DT may ask its shareholders to pony up for an equally bad deal and buy Sprint after Sprint sells Nextel to a consortium of investors organized by its co-founder, Morgan O'Brien. Sprint Nextel shareholders would no doubt be delighted to wash their hands of this mess, but given their losses, they'll be sure to demand a hefty price tag in compensation. Meanwhile, Deutsche Telekom shareholders will be led down the primrose path by Wall Street bankers who stand to enjoy a windfall of fees as a result of the new combination. Deutsche Telekom, which owns the fourth-largest U.S. wireless carrier, T-Mobile, will trumpet the deal as a chance to push into high-speed wireless market known as 4G and become the largest wireless carrier in the nation, with more than 74 million subscribers. That would put it ahead of AT&T T and Verizon VZ. Shareholders may want to consider how long it will take those subscribers to start jumping off the sinking ship they're about to pay for.
Dumb-o-meter score: 68. When in doubt, do a telecom deal.
Herbalife's diploma debacle; Wachovia: crank calls and crank dealers; JPMorgan's muni bond blind-siders; Archer Daniels' ethanolism; Scotts' Gro-ing pains.
The Cockapoo of Wall Street; GE's Old Yeller; Nat City adds insult to injury; a Royal Bank's pain; Gray Lady vs. Foxy Lady.
American Apparel -- accounting in peril; Wachovia whacked; Pilgrim's Pride squawks; Buster City: Traders' Ptooy-taries.
Yahoo! is among the most searched stocks on TheStreet.com. Here's what Cramer had to say about the stock recently.
Catch up on his thinking on the hottest topics of the past week.
Investors will have to deal with a Fed meeting and another flood of earnings and economic data.
Ensco International and Echelon have the potential to move higher in coming days.
See who made what calls.
The addition of video is helping telecom companies compete against cable and satellite companies.
The June West Texas Intermediate contract reflects selling pressure ahead of Tuesday's expiration. But stocks in the sector are generally trading higher.
See who made what calls.
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