How much should one get paid who loses 5 billion dollars for shareholders. Let me be a little more specific.
Lose 5 billion dollars for investors, lose money for three years and not one analyst believes you will do anything other than lose money for the next year. So, how much should you get paid for this? In the case Sprint Nextel Corporation (NYSE:S) our money squandering executive is paid $7 million a year.
On Friday, Sprint shares were down $0.05 (-1.35%) on volume of 34 million shares.
The most alarming thing about Sprint is the rate at which the losses are growing, especially in their wireless division. Where losses are up almost 100% from last year.
The company as a whole lost 863,000,000 last quarter which comes out to almost 10 million a day; a lot more if you factor in holidays.
In spite of all these losses and high paid execs, I don’t think Sprint is a fraud, but attorneys from New York state are singing a different tune. New York demanded they fork over 300 million dollars in taxes. The suit highlights the FCA (False Claims Act) which applies to Fraud Against the State, and Fraud Against Local Governments. Another vicious blow against the struggling enterprise.
Earlier this month, Sprint filed a registration statement with the SEC restructuring $1 billion inn debt. Basically, they refinanced and will save 2.375%. Which is should translate to 23.75 million in savings. A positive development, which unfortunately will not do anything to fend off the monstrous losses this company is expected by analysts to continue posting.
However, insiders at Sprint are long term believers in the company’s future. Over the last 6 months there have been 3 insider purchases totaling 250,000 shares. Cold hard cash plunked down to buy Sprint stock. Maybe they know something the numbers are not showing. Back in 2007 sprint was trading over $20 per share. Could it be that these insiders know something about a turnaround that can drive this stock back up to it’s former highs? If it goes back there. That would be an eye popping 600% + gain from today’s levels.
Time will tell, and we are waiting on the next financial reports which should be out after a few days. But not one brokerage firm on the street thinks they will earn a dime. Meanwhile Sprint’s beloved hero and fearless leader continues to line his pockets with millions while shareholders sit with billions in losses.
