SoftBank Group’s spree of buying Sprint Corp. stock has boosted the struggling U.S. wireless carrier by 50 percent over the past two weeks, adding $6.7 billion to its market value.
Sprint shares on Monday fell 2.5 percent to $5.06 at the close in New York.
As of Friday, the Japanese company had bought Sprint shares every day since Aug. 10, increasing its stake to 82 percent, according to a filing with the U.S. Securities & Exchange Commission. That’s below SoftBank’s targeted limit of 85 percent.
SoftBank’s billionaire founder, Masayoshi Son, reportedly had shopped Sprint but found no good buyer. He since has renewed his commitment to Sprint and Chief Executive Officer Marcelo Claure after the carrier showed signs of recovery in its most recent quarter, when it posted a third consecutive gain in subscribers. Son has said he already sees “light at the end of the tunnel” for a company that had booked losses in six of the past seven quarters, though he’s acknowledged that a turnaround may take two years.
As part of that turnaround plan, Claure has focused on network improvements, half-price offers and tablet promotions to lure customers. He’s also cut operating costs, which helped boost earnings before interest, taxes, depreciation and amortization to $2.08 billion in the fiscal first quarter that ended June 30. That topped the $1.8 billion average of estimates compiled by Bloomberg.
At the same time, the company has been burning through cash. Sprint’s cash and equivalents fell about $2 billion during the fiscal first quarter, which was 2.5 times the decrease in the period a year earlier. And even with the recent subscriber additions, the carrier fell behind T-Mobile US Inc. as the fourth-largest U.S. wireless carrier.