Edit: Sprint now on Bankruptcy watch


Sprint's Dan Hesse just got a warning notice from his board

To be fair, Hesse inherited a load of problems. The Nextel acquisition that predated him hasn't paid off. Sprint's move to WiMax has been an albatross. Customers were fleeing before he got there. And he inherited dueling corporate cultures in two headquarters, one in Overland Park, Kan., and the other in Reston, Va.

But his fixes have come up short. The MetroPCS acquisition didn't pan out, nor did talks about sharing a network with T-Mobile. You'd think the failure of AT&T's planned acquisition of T-Mobile would have helped, but that didn't really move the needle. And even Hesse's Hail Mary pass with the iPhone 4S has done little to get the company back into the black. In fact, the hefty subsidy costs have dragged its bottom line further into the red. At the same time, he's asking investors to be patient as he embarks on a costly network upgrade.

All that said, the detail of board room machinations in the Journal was surprising. Board members of major companies rarely telegraph what they're doing

Two main reasons I've stuck it out with Sprint is there lower rates and unlimited data. One thing I feared with Sprint landing the iphone was network strain which would force Sprint into tiered data plans or throttling. Seemingly its only a matter of time before Hesse follows Verizon/ATT structured data plans.

Sprint now on Bankruptcy watch

Sprint shares down after analyst cuts rating, notes chance of bankruptcy

Sanford Bernstein analyst Craig Moffett downgraded Sprint shares to "Underperform" from "Market Perform" in a morning note. He said credit default swaps are pricing in a 50 percent chance of the company seeking bankruptcy protection in five years."We suspect that this implied probability of bankruptcy will come as a surprise to most equity investors," Moffett wrote.

Nextel subscribers have been leaving in large numbers, while Sprint is still saddled with the cost of maintaining the Nextel network, which is incompatible with its own.Moffett said that the arrival of a new iPhone this year could be what finally pushes Sprint over the brink.

Moffett said Sprint has committed to buying iPhones for $15 billion from Apple, placing an additional burden on its finances.