Shares of Sprint (NYSE:S) fell 30% in 2017, according to data from S&P Global Market Intelligence. The wireless network operator and internet service provider had been hoping to join forces with fellow cell service T-Mobile US (NASDAQ:TMUS), but the stock collapsed when those merger talks were deep-sixed for good.
Sprint and T-Mobile have been glancing at the altar before, with Sprint making a bid for the smaller T-Mobile in 2014. Regulators seemed unlikely to approve that merger, so those talks were broken off for a couple of years. In 2017, Sprint had become the smaller network and T-Mobile would have been the dominant partner in the reworked business combination. But Sprint's parent company, Japanese telecom SoftBank, is led by billionaire Masayoshi Son, who really doesn't want to settle for second place behind T-Mobile CEO John Legere. That clash of personalities, plus a sketchy regulatory environment under the Trump-appointed version of the FCC, made a merger impossible.
While the canceled-merger drama played out, Sprint had very little good news on tap to turn Mr. Market's attention elsewhere. The company reported its first quarterly profit in three years in early August, but it missed Wall Street's targets in all four of its earnings reports anyway. The company keeps bleeding retail subscribers and is in dire need of new ideas. A merger deal could have been the perfect endgame for Sprint, but management needs to find another partner since T-Mobile is off the table.
It's a pretty grim story overall. I don't see Sprint's low share prices as an invitation to buy the stock. The plunging stock chart is well-deserved.