Sprint (S) is down sharply today, heading toward penny-stock land. Shares are at $1.70, off their 52-week high of $13.90.
Much of the drop is due to its falling cellular subscriber base which contrasts to gains at rivals Verizon Wireless (VOD)(VZ) and AT&T (T). Sprint’s newest trouble could be just as bad.
Late last week, Adaptix, a WiMax service provider challenged several of the WiMax patents held by Sprint and its partner Clearwire (CLWR). The two companies are in the process of building a nationwide WiMax 4G network. It is safe to say that Sprint is gambling its future on the project’s success. If the network is completed it would allow the cellular service to provide faster wireless internet than its rivals’ current 3G networks giving it an important edge with customers.
According to Bizjournal, Adaptix says that six of its patents are in question. If the claims are valid, the legal action could significantly slow Sprint’s progress in moving to its new system
Douglas A. McIntyre