Relational Investors, which is run by activist shareholder Ralph Whitworth, has stealthily built a stake in Sprint Nextel worth about $500 million, nearly 1 percent of the carrier. Whitworth is using his sway to urge management to pull back on capital spending and sell its fiber-optic networking operation and long-distance business. Of course, Sprint's $55 billion market capitalization makes it difficult for any one shareholder to force changes, but the carrier has obviously hit a bit of a slump.
According to a report in The Wall Street Journal, many investors and former employees of Sprint Nextel say top executives failed to make key personnel, marketing and technology decisions after the Nextel merger, which led to the company's plummeting shares and posted losses.
For more on the state of Sprint:
- see this report from the WSJ (sub. req.)