Stocks That Won’t Exist in a Decade: Sprint (S)
The Way Out: Buyout
Like Valeant, Sprint Corp (NYSE:S) has a huge debt load. But Sprint stock has gone in the opposite direction of VRX stock. S stock has tripled from early 2016 lows, even after some modest weakness in 2017.
Sprint’s bankruptcy risk isn’t zero, but it’s far lower than it appeared to be just 18 months ago. An innovative bond backed by the company’s massive spectrum holdings has lowered interest expense and extended debt maturities. Meanwhile, steady subscriber growth and share gains at the expense of Verizon Communications Inc. (NYSE:VZ) and AT&T Inc. (NYSE:T) have improved the company’s earnings profile.
That improvement has made Sprint one of the most discussed acquisition targets in the market. Verizon, AT&T and DISH Network Corp (NASDAQ:DISH) all have been rumored suitors. A combination of Sprint and T-Mobile US Inc (NASDAQ:TMUS) is another possibility. Whatever the outcome, the odds of Sprint looking the same in 2027 as it does in 2017 seem very slim indeed.