Sprint’s Stock Jumps After CEO Predicts Consolidation
Sprint Nextel Corp. (S), the third- largest U.S. wireless carrier, rose the most in more than a month after Chief Executive Officer Dan Hesse said the company would probably play a role in future consolidation.
The shares climbed 7.1 percent to $5.56 at the close in New York, the biggest gain since Aug. 15, bolstering a stock that had already more than doubled this year.
The industry is likely to undergo a wave of mergers and acquisitions, said Hesse, speaking at a Goldman Sachs Group Inc. investment conference today in New York. Consolidation would let smaller U.S. wireless carriers band together to take on the two largest competitors, Verizon Wireless and AT&T Inc.
MetroPCS shares rose 5.2 percent to $11.30 today. Clearwire Corp. (CLWR), the provider of a high-speed wireless network that counts Sprint as its biggest customer and investor, also gained. Its stock climbed 13 percent to $1.56.
There are two types of deals Sprint may encounter, Hesse said today. One is a large-scale deal to gain significant enough size to better challenge the two dominant competitors. The other would be smaller and have more immediate cost benefits and synergies, he said.
Hesse has said he wouldn’t want to enter a deal that would be a distraction while the Overland Park, Kansas-based company builds a new network using long-term evolution, or LTE, technology. Sprint is trying to catch up with more extensive LTE networks offered by Verizon and AT&T.
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