Leap Wireless ( LEAP) foiled pessimists with stronger-than-expected fourth-quarter numbers and support from a big inside buyer.

Shares of the flat-rate wireless shop surged 18% Tuesday after the company reported that it added 152,000 net new subscribers. The solid gains squashed fears that the subprime credit crunch would cut into Leap's sales to its more credit-challenged customer base.

But the company managed to reduce its monthly defection rate, or churn, one percentage point to 4.2% from an alarming 5.2% in the third quarter.

"As our business continues to follow its normal seasonal rhythms, we believe we are positioned for further growth," CEO Doug Hutcheson said in a press release.

Leap chairman Mark Rachesky, former chief investment officer for Carl Icahn and founder of private-equity shop MHR Fund Management purchased over 3 million shares of Leap last month.

Leap and rival MetroPCS ( PCS) were unsuccessful in merger negotiations last year, but observers say they expect those talks to heat up again in May after the Federal Communications Commission wireless auction. Air wave spectrum bidders are prohibited from talking about mergers until after the auction ends.

Leap shares rose $6.85 to $44.69 Tuesday.