Shares of both Sprint Nextel and Palm fell yesterday after a report by an analyst at Wachovia Securities indicated the Palm Pre was doing little to attract new customers to Sprint.
The report, by Wachovia analyst Jennifer Fritzsche, concluded after a survey of retail outlets that most Pre buyers are existing Sprint subscribers. Fritzsche suggested that, at least so far, the Pre was not peeling off subscribers from other carriers such as AT&T Mobility and Verizon Wireless.
Sprint stock fell 33 cents, or 6.1 percent, to $5.11 per share yesterday at the close of trading--its biggest drop since May 13. Palm stock fell 68 cents, or 4.7 percent, to $13.67 per share at the close yesterday. This morning, Sprint stock was trading up 7 cents to $5.18 per share, while Palm was down 30 cents per share to $13.37.
Sprint has lost more than 4 million postpaid subscribers over the past year and is hoping the Pre will help at least stop the defections. Palm, meanwhile, has been rumored of late to be a possible acquisition target.
- see this Bloomberg News article
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