This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Sprint Takeover Drama Is Far From Over

Stocks in this article: CLWR S DISH T VZ

Wall Street Horse Races Pit Speculators against Consumers

A handful of influential parties are poised to make their voices heard in Sprint's takeover of Clearwire and SoftBank's offer to buy Sprint with just a week left until crucial shareholder votes.

Expect a frenzy of headlines and activity on Wall Street.

Dish needs to firm up billions in financing for its debt-laden proposal to buy Sprint. Sprint and SoftBank, meanwhile, may need to have bankers on speed dial given the prospect of rising takeover prices. Investors who speculated in Sprint and Clearwire shares when both companies were priced for failure aren't likely quit on some of the canniest merger arbitrage bets in recent years.

Influential proxy advisors, who are in the business of making clear recommendations to shareholders, unlikely to agree on the Clearwire and Sprint transactions.

What spectacle, and what a horse race.

Unfortunately for wireless consumers, who are probably only interested in industry consolidation for the prospect that also-rans such as Sprint and T-Mobile (TMUS) come out of the process better equipped to provide a reliable, low-cost alternative to premium-priced plans offered by AT&T (T) and Verizon (VZ), a frenzied conclusion could leave the industry with more debt, less cash and worse off.

Sprint and Clearwire's special committees have to answer to Dish's late entrance as an aggressor in the wireless industry and provide a clear basis to investors for Sprint and SoftBank's merger efforts or those of Dish.

While shareholders are certain to get their representation, hopefully interested parties also take account the best outcome for consumers.

One possibility is Dish uses its agitation of wireless consolidation as a means to negotiate a network sharing agreement with Sprint that could leave all parties better off. A network sharing agreement would also snuff out the bidding war that some on Wall Street are pulling for.

A hosting agreement with Sprint would allow Dish to build out its wireless ambition and create a credible new service bundle in the market to challenge AT&T and Verizon, according to Wells Fargo analyst Jennifer Fritzsche. Sprint, meanwhile, would get an additional revenue stream similar to a 15-year deal it negotiated with now-defunct wireless service LightSquared, which would have paid the carrier $9 billion for access to its network.

While Dish's proposals for Clearwire and Sprint would be seen as brinksmanship in such an outcome, it could leave all parties better off financially and the industry more competitive.

Sprint's takeover is the crucial element to a wireless industry reconfiguration that's poised to be one of the biggest consumer stories of this decade.

-- Written by Antoine Gara in New York

3 of 3

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • 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 Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,778.15 +421.28 2.43%
S&P 500 2,061.23 +48.34 2.40%
NASDAQ 4,748.3960 +104.0840 2.24%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs