There were a lot of possible deals investors were theorizing for Sprint Nextel (NYSE:S) that would help the nation’s (distant) No. 3 wireless carrier compete against Verizon (NYSE:VZ) and AT&T (NYSE:T). The acquisition of MetroPCS (NYSE:PCS) was the odds-on favorite … until Deutsche Telekom (PINK:DTEGY) took it off the table by initiating the merger of MetroPCS with its current U.S. wireless business, T-Mobile. Leap Wireless (NASDAQ:LEAP) was also on the table as a very affordable pickup for Sprint.

Sprint didn’t necessarily have to be the buyer for a deal to work well, either. It could have also been an acquisition target and still helped create a synergy that would make a difference in its war against Verizon and AT&T. A partnership with Dish Network (NASDAQ:DISH), with its huge television subscriber base and desire to get into the mobile broadband game, was one possibility. And, as crazy as it initially sounded, the folks who imagined Apple (NASDAQ:AAPL) buying Sprint Nextel actually had some valid points.

None of those deals materialized, though. It’s fair to say the deal that materialized is very close to the bottom of the list of hypothesized possibilities — Japan’s mobile carrier Softbank.

What’s going on here, and perhaps more important, should Sprint’s investors be selling, or buying more?

Who? Why?

If you’ve never heard of Softbank, don’t worry — you’re not alone. It’s a Japanese mobile phone service, and not even Japan’s biggest. Only thanks to a deal put together earlier this month (with eAccess), the company serves 34 million subscribers, making it that country’s second-biggest player. For comparison, Sprint serves around 56 million U.S. wireless subscribers; it’s a case of the mouse eating the cat.

Still, it doesn’t answer the question, “What’s in it for Softbank?”

The deal will clearly expand Softbank’s revenue-bearing customer base, but certainly not for free. In fact, Softbank is offering a 15% premium to Wednesday’s closing price for the stock, before the proposal was unveiled.

And it’s not like the union of the two companies will be immediately profit-accretive for Softbank. Sprint, though making progress on the earnings front, is still losing money.

Is a money-saving, efficiency-creating synergy in the cards? Perhaps there’s a little of that, but as Deutsche Telekom can attest based on its experience with owning U.S. telecom player T-Mobile from abroad, there’s not a lot of cost-sharing going on, as T-Mobile still requires plenty of domestic bureaucracy to keep it running. (The fact that Deutsche Telekom was willing to sell T-Mobile to AT&T last year should underscore the idea that owning a telecom name from abroad isn’t necessarily all it’s cracked up to be.)

So what’s the value Softbank is trying to unlock here? Most likely, it’s Clearwire (NASDAQ:CLWR), a key Sprint asset that surged 70% on Thursday after investors put two and two together.

Sprint owns a 49% stake in Clearwire, a mobile broadband service provider. Softbank is building a mobile broadband network in Japan that’s based on the same basic technology Clearwire is using. That’s also why Softbank acquired eAccess last week … though not just because its technology was compatible. eAccess also owns the rights to use a great deal of spectrum (radio frequencies needed to deliver mobile broadband service) in Japan. Clearwire has rights to a wide band of FCC-licensed spectrum here in the United States, and Sprint has a big chunk of it as well. With that spectrum needed to make smartphones viable, Softbank will also be gaining control of what’s quickly becoming a hot commodity. If there’s any part of the deal that’s a clear home run, that’s it.

One can also assume Softbank is interested in Sprint for the old-fashioned reason for any deal: The company believes it can do better with Sprint than Sprint’s currently doing on its own.

That’s a lofty expectation, though, made even loftier by a surprisingly fickle U.S. telecom consumer.

Now What?

Interestingly, Clearwire was upgraded by a handful of analysts Thursday, but only after the stock had made most of its big move. Standard & Poor’s also announced Sprint was being placed on its upgrade watchlist … after the stock had popped 15%.

While the Johnny-come-lately effort is bullish on the surface, it’s also of no benefit to traders. The market priced in most or all of the potential upside almost immediately after Softbank made its announcement, effectively leaving Clearwire and Sprint shares nowhere to go, with or without upgrades. It’s unlikely Softbank will be able to squeeze anything more out of either company in this stunningly competitive U.S. telecom market.

So the smart-money move here may actually be to get out while the gettin’s good.

The cat’s out of the bag, and it’s unlikely Sprint is going to become the centerpiece of a bidding war. Indeed, there’s no guarantee the Softbank deal will go through at all. On the flip side, while there’s limited upside from here, should the deal fall through, there’s plenty of perceived downside for both stocks. (Welcome to trading, where psychology is at least as important as measurable value.)

Said another way, the risk/reward ratio based on current share prices is heavy on the risk, light on the reward.

Speculators looking for the next likely buyout target may want to take another look at Leap Wireless, which had fallen off the radar after Deutsche Telekom announced it was bringing MetroPCS into the fold. Now Leap is one of the few remaining possible acquisition targets that’s worth a suitor’s time or effort.

As of this writing, James Brumley did not hold a position in any of the aforementioned securities.