It must be pretty tough running a beleaguered wireless company like Sprint Nextel
While Sprint Nextel has yet to comment on the rumored overture, SK Telecom issued a statement denying any interest in purchasing the company. The official response makes more sense than the rumor, since Sprint Nextel's more than $63 billion market cap dwarfs SK Telecom's $18 billion. Also, SK Telecom and partner EarthLink
Speculation about a Sprint Nextel acquisition heated up when peer service provider Alltel
From this Fool's perspective, I'm surprised the market took a rumored deal between SK Telecom and Sprint Nextel seriously at all. Sprint Nextel's stock has risen roughly 30% since bottoming out earlier this year, making it a pricey takeover candidate given its current uncertainty in operations. And unfortunately for the contrarian in me, I see Sprint Nextel as suffering from the Goldilocks syndrome -- it's not so bad that it's a steal, but not so hot that it's a buy. It's priced with just the right lukewarm balance of uncertainty and speculation to make it unattractive to buyers -- particularly private equity -- looking for a predictable return.
Call up more Foolish insight:
- Sprint Nextel Says "Hold, Please"
- 5 More Stocks Under Attack
- Wireless Smackdown: Comparing Carriers' ARPU
Fool contributor Dave Mock now thinks twice before offering hot dogs to even friendly-looking pit bulls. He owns no shares of companies mentioned here. He is the author of The Qualcomm Equation. The Fool's disclosure policy courts investors with unparalleled warmth and care.