Is Leap Wireless another subprime-y victim?

Along with everything else that’s been getting absolutely killed over the past four trading sessions, wireless carriers catering to lower-income consumers are getting obliterated. MetroPCS (Symbol: PCS) is down 27%, Virgin Mobile USA (VM) is down 5% and Leap Wireless (LEAP) has lost a whopping 45% after disclosing that past accounting errors required the company to restate results back to 2004. This mini-sector now looks like yet another short play on the retrenchment of the once free-spending shoppers who fueled all manner of toys and goodies with home equity gains. Satellite TV provider EchoStar (DISH) got downgraded for a similar issue.

Leap’s problem wasn’t just the accounting errors. The restatements could put the company in default on $890 million of loans, Leap said. And the company also said it added fewer than 37,000 net new customers in the third quarter and would add only 70,000 to 130,000 in the fourth quarter. Leap added 161,000 in the third quarter of 2006 and another 260,000 in the final frame of last year.

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