Sprint Drops on Moody's Credit Rating Cut: Telecom Winners and Losers

NEW YORK (TheStreet) -- Sprint (S) fell Wednesday after Moody's cut the mobile carrier's credit rating, causing its bonds to lose more than $1.5 billion.

Moody's cut Sprint's credit rating to B3 from B1, or six levels below investment-grade, citing pressure from "brutal competition" in the U.S. wireless industry and concerns that Sprint will need "significant" additional funding, Bloomberg reported.

A Sprint spokesman told Bloomberg the company doesn't plan to seek additional capital from the debt or equity markets and is working on a funding plan with Softbank (SFTBF) , its majority shareholder.

Sprint shares fell 5.6% to $4.68.


Comcast (CMCSA)  plans to create a new unit to sell Internet and phone services to large businesses across the country, even outside its service areas, to help lure customers away from telecom providers such as AT&T (T) and Verizon (VZ), the Wall Street Journal reported Wednesday.

Comcast has deals with cable operators including Cox, Time Warner Cable (TWC), Charter  (CHTR), Cablevision  (CVC) and Mediacom to offer services using their equipment, according to the newspaper.

Comcast gained 1.1% to $57.74. AT&T was largely unchanged at $32.93 while Verizon declined half a percent to $46.17.


EarthLink (ELNK) dropped 5.4% Wednesday to close at $8.35 after it went ex-dividend. A cash dividend payment of 5 cents a share is scheduled to be paid on Oct. 2. Atlanta-based EarthLink is an IT services, network and communications provider.


Sky-mobi (MOBI) fell 5.5% to $2.75, on no apparent news. The company is a China-based mobile application platform.

 

  This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.

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