Fears Related to a Sprint (S) Capital Raise May Be Overdone -BTIG
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Price: $21.57 +1.84%
Rating Summary:
15 Buy, 13 Hold, 0 Sell
Rating Trend:
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Today's Overall Ratings:
Up: 13 | Down: 11 | New: 14
Rating Summary:
15 Buy, 13 Hold, 0 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 13 | Down: 11 | New: 14
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Following a nearly 60 percent decline in the stock since late-July amid a plethora of justifiable concerns, BTIG's Walter Piecyk is defending Sprint (NYSE: S) Wednesday morning.
The analyst believes investor and analyst's latest fears -- speculation surrounding the company's ability to raise capital -- could be overdone. The note follows a somewhat scathing report from Piecyk earlier this week which questions the availability of the new iPhone 4S through Sprint -- specifically, the fact that the iPhone is still available from the carrier.
Piecyk said, "In the past we have noted Sprint's need to refinance the upcoming $2.25 billion Q1 debt maturity but our concerns were targeted at the rising cost to replace that debt and the need for more cash to fund its strategic moves rather than Sprint's ability to actually raise new capital."
The analyst points to Sprint's cash position of $4 billion and a draw down of about $1 billion on its current revolver leading to a remaining $3 billion in cash after paying off the first-quarter maturity. Piecyk argues this would be enough cash to negate burn over the next year and a half, however notes such a move would clearly "restrict additional strategic moves and needed spectrum purchases."
Piecyk maintains a Neutral rating on shares of Sprint.
Sprint shares are continuing to bounce Wednesday. Following a 7.2 percent move higher Tuesday, the stock is up about 5.6 percent this afternoon.
The analyst believes investor and analyst's latest fears -- speculation surrounding the company's ability to raise capital -- could be overdone. The note follows a somewhat scathing report from Piecyk earlier this week which questions the availability of the new iPhone 4S through Sprint -- specifically, the fact that the iPhone is still available from the carrier.
Piecyk said, "In the past we have noted Sprint's need to refinance the upcoming $2.25 billion Q1 debt maturity but our concerns were targeted at the rising cost to replace that debt and the need for more cash to fund its strategic moves rather than Sprint's ability to actually raise new capital."
The analyst points to Sprint's cash position of $4 billion and a draw down of about $1 billion on its current revolver leading to a remaining $3 billion in cash after paying off the first-quarter maturity. Piecyk argues this would be enough cash to negate burn over the next year and a half, however notes such a move would clearly "restrict additional strategic moves and needed spectrum purchases."
Piecyk maintains a Neutral rating on shares of Sprint.
Sprint shares are continuing to bounce Wednesday. Following a 7.2 percent move higher Tuesday, the stock is up about 5.6 percent this afternoon.
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