Sprint Climbs on SK Telecom Rumors

Updated from 3:09 p.m. EDT

Shares of Sprint Nextel (S Quote) surged Tuesday on reports SK Telecom (SKM Quote) would form a strategic partnership that would aid the struggling wireless provider's recovery.

The Wall Street Journal said that South Korea-based SK Telecom was discussing a venture with Sprint to develop new handsets that will function on both providers' CDMA network, according to sources close to the matter.

That news contradicted an earlier report from CNBC, which said SK Telecom was in talks to purchase Sprint. The Journal article said both companies have discussed the idea of SK Telecom making a minority investment in Sprint, but they aren't pursuing an outright merger.

Late last year, Sprint spurned a $5 billion investment from SK Telecom and Providence Equity Partners. At that time, shares of Sprint traded just south of $20. Since then, they have lost more than 50% as the wireless provider has dealt with high customer losses to rivals Verizon (VZ Quote) and AT&T (T Quote).

Sprint representative James Fisher told TheStreet.com that it was company policy not to comment on rumors or speculation. Shares of Sprint jumped 9.4% to close at $9.04, after having traded as low as $7.86 earlier in the session. SK Telecom ended down 2.5% to $20.57.

Among other wireless providers, Verizon rose 0.5%, and AT&T dropped 1.3%. Deutsche Telekom (DT Quote), which operates T-Mobile in the U.S. and was once considered to be a bidder for Sprint, was off 1.1%.