Reports that Sprint Corp (NYSE:S) chairman Masayoshi Son could soon secure sizable investments from two billionaire businessmen have boosted the price of S stock in recent days. Son is the founder of Softbank, which owns a controlling stake in the fourth-largest U.S. wireless phone service.

The investment would be a welcome sign at Sprint, where things have not been going that well since Softbank got involved.

Son reportedly met with Warren Buffett to discuss the Oracle of Omaha’s investing $10 billion in some capacity. Sprint has also been suggested to be working on agreements with Charter Communications Inc and Comcast Corporation (NASDAQ:CMCSA), both of which would like to gain more exposure to the mobile phone market.

Sprint could definitely use some help. Earnings are essentially non-existent and have been for years. Analysts expect it to lose 4 cents a share this year and project only a slight turnaround to positive — 4 cents — in 2018. Sales are expected to be flat over the next two years at close to $34 billion.

Bigger Players

Sprint is a large company, but is much smaller than the largest to players in the industry. AT&T Inc. (NYSE:T) — which also operates a huge cable business with its U-Verse and DirecTV offerings — should log $161 billion in sales this year. Verizon Communications Inc. (NYSE:VZ) should report $122 billion in sales. T-Mobile US Inc (NASDAQ:TMUS) has come on strong in recent years and is expected to post more than $40 billion in sales for all of 2017.

Verizon is actually the largest cellular provider in terms of number of subscribers. In the first quarter of this year it boasted 146 million subscribers. AT&T is second at 134 million, followed by T-Mobile at almost 73 million. Sprint is fourth at 59 million subscribers. U.S. Cellular is fifth, but far away, with only 5 million subscribers.

Sprint has lost an average of $2 billion over the past three years. Reported cash flow has been must stronger and has averaged $4 billion over the last couple of years. But expenditures to build out and maintain its cellular network have eaten up most of that cash flow.

Years of excess spending have saddled Sprint with nearly $36 billion in debt, though it had more than $8 billion in cash in the bank as of the end of its last fiscal year. In short, its financial profile is a mess.

But that doesn’t mean investors should run for the hills. Softbank should keep propping up Sprint indefinitely, and if billionaire investors are talking with Sprint, that suggests it has an enviable collection of wireless assets, including coveted spectrum that will be needed to help millions of Americans stream their favorite videos to their phones.

Fierce Competition

Sprint could also combine with T-Mobile to more closely compete with AT&T and Verizon. And, as noted, the large media and cable providers are interested in being able to offer their customers mobile phone services. More services make it less likely a customer will switch to a competitor.

One other problem is the U.S. market isn’t growing as fast as it once did. Total subscriber numbers have been flat at around 400 million over the past two years. Cellular networks also take billions of dollars in investments, and the carriers must continually spend to boost coverage and evolve with technology.

The industry is fiercely competitive, but smart phone usage is growing strongly. Consumers are spending more and more time on their phones to watch videos and use social media. Softbank is also very profitable overall, so that Sprint is losing money isn’t a huge concern.

Sprint has some takeover appeal, and would be in a much stronger position if it merged with T-Mobile. But that would mean several more years of struggles as the carriers are combined. They would also face regulatory scrutiny, which would take up more time.

Bottomline on S Stock

AT&T and Verizon look much safer. Though they aren’t growing rapidly either, they are firmly profitable and boast above-market dividend yields. T-Mobile is growing briskly on the back of marketing that is resonating with consumers, though it is also spending much more cash than its operations generate.

I would leave Sprint in the too-difficult investment category. It could of course go up on any investment or merger speculation, but its financial results are depressing enough to justify steering clear of S stock.

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