SoftBank Ups Its Stake in Sprint

SoftBank Chairman and CEO Masayoshi Son has backed up his recent bullish statements about Sprint's long-term potential with an additional purchase of Sprint shares that takes SoftBank's stake in the US operator to almost 80%.

Through a subsidiary called Galaxy Investment Holdings, SoftBank Corp. , which acquired its majority stake in the US operator in July 2013, purchased an additional 22.87 million Sprint Corp. (NYSE: S) shares, equivalent to a 0.58% stake, for $86.9 million. That takes SoftBank's total holding to 3,173,958,465 shares, or 79.99% of all Sprint stock. (See Softbank Closes on Sprint Acquisition.)

The investment is "intended to increase the Company's beneficial ownership in Sprint," SoftBank noted in an official statement, and is set to be followed by further similar additional share purchases, though SoftBank says that it "does not intend to increase its ownership of Sprint outstanding common stock to 85% or more." (Breaching that level would make Sprint a candidate for delisting from the NYSE.)

SoftBank added that it has "dedicated significant resources to optimizing Sprint's network strategy and is supporting the development of innovative lease financing structures. In light of these and other turnaround initiatives, the Company is confident in Sprint's future prospects, and therefore decided to carry out the Additional Purchases."

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The move comes days after Son joined Sprint CEO Marcelo Claure on the US operator's fiscal first-quarter earnings call and talked of plans for "a big turnaround" at Sprint, which was then followed by the launch of the operator's Open World service plan. (See Sprint Promises Better LTE on Lower Capex and Sprint Follows T-Mobile Across the Borders.)

That came a day after Claure unveiled a new top team. (See Sprint Swaps in a New CFO, COO & CTO.)

It also follows some expression of doubts about Sprint's potential in the US media, including this Wall Street Journal article.

Sprint's share price closed Wednesday at $3.88 but has gained 5.7% to $4.10 in pre-market trading this morning.

— Ray Le Maistre, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, Editor-in-Chief, Light Reading

kq4ym 8/27/2015 | 10:59:12 AM
Re: Trompe l'oeil And here's another vote for hoping Sprint can hang in there with Softbank to keep the competition keen. Interesting how they want to keep the share ownership below the 85% level to avoid stock exchange delisting.
danielcawrey 8/15/2015 | 11:31:42 AM
Re: Trompe l'oeil While I once thought of Sprint as a top tier player in wireless, I feel like that is now fading away. Verizon and AT&T clearly dominate wireless coverage and speeds, which makes Sprint a tought choice to make when customers are looking for a new carrier. 

I hope SoftBank can bring renewal to the company. The more competition, the better. 
mendyk 8/14/2015 | 9:40:41 AM
Re: Trompe l'oeil Well, yeah, and remember that a stock purchase is essentially a shift of money from one pile to another -- albeit a less stable pile.
[email protected] 8/14/2015 | 2:58:46 AM
Re: Trompe l'oeil It was worth $86.9 million apparently! 

THis does indeed look like gesture financing.
mendyk 8/13/2015 | 2:43:18 PM
Re: Trompe l'oeil That's a possibility, but the original point is that Son's purchase of additional Sprint shares isn't an indicator of anything since he already owned close to 80% of the company, and he still owns close to 80% of it. But it did make for some good free publicity, and the share price went up for today. So mission accomplished, for what it was worth.
sineira 8/13/2015 | 2:38:01 PM
Re: Trompe l'oeil Yes but it does look to me like new plans are in progress. They have a lot of work to do to catch up, but the plan seems to be to do so. And Son seems willing to take the losses until they have caught up.


mendyk 8/13/2015 | 2:11:27 PM
Re: Trompe l'oeil A story appears in an influential newspaper (still not an oxymoron) that questions the commitment of ownership to a company. The owner in question answers those questions by buying another 0.5% of the company's stock, moving his total ownership from something like 79.4% to 79.9%. He's already all in on this company, and the additional purchase does nothing to change the fundamentals of the company -- the key one being it has lost money for years and would have to engage in a pretty significant capital investment (read even more losses) to have a chance at reversal.
sineira 8/13/2015 | 2:05:14 PM
Re: Trompe l'oeil I would think there's actually more out there than meets the eye.
mendyk 8/13/2015 | 10:07:13 AM
Trompe l'oeil Seems to be less here than meets the eye.
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