Other analysts have also highlighted the broader impact of Sprint's deal with Softbank.
"We believe Softbank's investment will spark further consolidation, likely starting with Sprint's acquisition of Clearwire (CLWR)," wrote Jonathan Chaplin, an analyst at Credit Suisse, in a note released on Monday. "New capital from Softbank will enable Sprint to accelerate consolidation of the industry."
Chaplin, who sees the deal as a positive for Sprint and other carriers, has an outperform rating on Sprint.
"[The] cash infusion gives Sprint [the] ability to look at Clearwire," added Mike McCormack, an analyst at Nomura Equity Research, in a note. "With an $8bn cash infusion, treating the convertible bond as equity, Sprint would immediately see its leverage level fall from 3.6x 2013 EBITDA to 2.1x, removing any doubt of the company's ability to fund the business and compete aggressively."McCormack also noted that the deal allows Sprint to purchase the $1.6 billion un-owned Clearwire equity stake and refinance Clearwire's $4.2 billion of gross debt. Sprint is Clearwire's largest shareholder, with a 48.1% stake in the Bellevue, Wash.-based company. Shares of LTE specialist Clearwire rose 12.07% to $2.60 in premarket trading on Monday. AT&T shares dipped 0.03% to $35.62 before market open on Monday. Verizon shares crept up 0.18% to $44.7. --Written by James Rogers in New York. Follow @jamesjrogers >To submit a news tip, send an email to: email@example.com.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV