Sprint Nextel has been hit with another class-action lawsuit, this time in a far-reaching suit that claims the wireless carrier misrepresented the company's health to investors following its 2005 merger with Nextel.
The law firm of Coughlin Stoia Geller Rudman & Robbins said in a release that it filed a class-action lawsuit against Sprint in the United States District Court for the District of Kansas. The suit is seeking out plaintiffs and is pursuing class-action status for investors who purchased Sprint stock from Oct. 26, 2006 to Feb. 27, 2008.
The complaint alleges that Sprint directors and executives issued materially false and misleading statements regarding Sprint's financial results and the health of the company's business, and that as a result "Sprint stock traded at artificially inflated prices."
Sprint spokesman Matt Sullivan said that the company was aware of the suit. "We're aware of the press release and we're confident that Sprint has, and will continue to operate in complete adherence with all federal securities laws," he told FierceWireless.
The carrier has faced many difficulties since its 2005 merger with Nextel. These include long-running litigation with affiliate iPCS over exclusivity agreements iPCS holds in territory where's Nextel's iDEN network operates, customer service issues (which the carrier has said have improved dramatically) and a declining subscriber base.
Sprint lost 5.1 million subscribers in 2008, and wireless revenue fell by $3.1 billion, or 32 percent, as compared to 2007. When the carrier reported its fourth quarter earnings Feb. 19, revenue fell to $35.64 billion, down 11.2 percent from revenue of $40.15 billion in the year-ago quarter.
- see this release
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