Sprint Nextel Corporation (S): Will It Help You Retire Rich?

The big news for Sprint over the past year came last October, when Japanese telecom SoftBank agreed to invest $8 billion in the company and pay existing shareholders an additional $12.1 billion in exchange for taking a 70% stake in the newly recapitalized Sprint. The move to take such a big stake in the No. 3 provider may seem odd, but SoftBank CEO Masayoshi Son believes that rivals AT&T Inc. (NYSE:T) and Verizon Communications Inc. (NYSE:VZ) have been far too slow in embracing the cold reality that data service is the key driver of success in the market. With separate voice and text service largely giving way to data-driven alternatives, Son thinks Sprint can excel by focusing more on data than Verizon Communications Inc. (NYSE:VZ) and AT&T Inc. (NYSE:T) have thus far.

One open issue for Sprint Nextel Corporation (NYSE:S), however, is its proposed merger with Clearwire Corporation (NASDAQ:CLWR) . Sprint and Clearwire agreed to a $2.97 per share buyout bid back in December, but a rival bid from DISH Network Corp. (NASDAQ:DISH) for $3.30 per share has thrown the transaction into question. With substantial amounts of spectrum and other valuable assets, Clearwire Corporation (NASDAQ:CLWR) is an important piece of Sprint’s overall strategic puzzle going forward.

Of equal importance is which direction Sprint will go in the smartphone area. The company made a huge commitment to the iPhone a couple years ago in order to get access to the device, but recently, Sprint has started making moves to encourage sales of Android-based smartphones. With subsidies representing a big obstacle to profiting from iPhone sales, Sprint appears poised to look for better margins elsewhere.

For retirees and other conservative investors, Sprint Nextel Corporation (NYSE:S) remains far too speculative to include as a core component of a retirement portfolio. Only those willing to take on high levels of risk should consider taking a position in Sprint.

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The article Will Sprint Help You Retire Rich? originally appeared on Fool.com.

Fool contributor Dan Caplinger has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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