Internet service provider
surged 16% after receiving a large endorsement from
said Tuesday it would increase its stake in
to 26.7%, with the infusion of $431 million through the purchase of 26 million shares.
Shares of EarthLink rose 2 5/8 to 19 5/8 while Sprint slipped 1/4 to 60. (EarthLink closed up 1 7/16, or 8%, at 18 7/16 while Sprint closed down 3/8, or 0.6%, at 59 7/8.)
After the completion of EarthLink's merger with
percentage of holdings was reduced to about 15%.
Under the terms of the original agreement, Sprint could own up to 28.7% of outstanding EarthLink shares. Sprint has until the beginning of August to buy the remaining shares, according to its deal with the Internet service provider.
EarthLink has been aggressively marketing high-speed Internet service, which has been one of the fastest growing areas of the Web. The Atlanta-based company already has about 3.5 million subscribers to its Internet dail-up service, which most consumers use.
High-speed Internet access, however, offers more profits and a robust growth rate as the prices become more affordable to the average consumer.