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What: Shares of wireless No. 3 Sprint Nextel
So what: In outlining its plans for the future today, Sprint said that the rollout of its new Long-Term Evolution network is going well and will cover as many people as the WiMax coverage it currently offers from a partnership with Clearwire
Big network revamps like this don't come for free, though. The positive momentum that Sprint shares had in the morning evaporated like so much delicate morning dew as investors grew heated over the company's admission that it will need to raise new capital or draw on its line of credit to finance its build-out.
Now what: Earlier in the week I said that Sprint's move to get the iPhone -- assuming reports of its hefty commitment are true -- looked like a "wild pitch" to desperately try to keep pace with its competitors. My view hasn't changed since then. However, the company's push to roll out its fast new network is much more interesting and could help get the company back on track if it can give customers a really positive experience.
Value investors like Dodge & Cox and David Einhorn's Greenlight Capital have flocked to Sprint because although the company is unprofitable, it is still cash-flow positive. That's all well and good, but with nearly $19 billion in debt and a business that's having trouble keeping up with competition, it's still crucial that the company spend money wisely and find its footing.
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