Shares of Sprint (S) are up 32 cents, or 8%, at $4.20, in lte trading, after financial backer SoftBank (9984JP) said Wednesday it purchased $87 million worth of its stock as a show of confidence in the carrier, according to a write-up this evening by Ryan Knutson of The Wall Street Journal. Such purchases will be made by SoftBankG’s wholly owned subsidiary, Galaxy Investment Holdings, Inc.
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SoftBank President Masayoshi Son told a news conference on August 6 that he intended to improve Sprint’s businesses over the next two years.
SoftBank said on Wednesday it was “enthusiastic” about Sprint’s prospects and working closely with Sprint on its “network strategy to enhance Sprint’s competitiveness and reduce its capital expenditures and operating costs”.
In light of these and other turnaround initiatives, SBG believes that Sprint shares are fundamentally undervalued.
He thought that his plan was misjudged by the regulatory environment and he started looking for a buyer for Sprint. Meanwhile, Mr Son remains committed to the turnaround of the company, telling the WSJ: “If nobody wants to buy it and we still have the customers, we still have employees, so I have to take care …”
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Sources familiar with the matter have suggested that Arora has privately expressed his frustration with Softbank’s ownership of Sprint and has recommended selling it. However, despite apprising both Comcast and Altice of the situation, neither company has opted to pursue a deal at the current time. Sprint has said it would install tens of thousands of small cells to boost capacity and data speeds.
