Thoughts on Sprint as a turnaround?

Hey everyone,

I have been looking at S as a potential addition to my personal account, and was also thinking of pitching this to the student investment club I run. I am at the very beginning of the research process, but there are a view things that stick out:

1. According to Marcelo Claure, the new CEO, S is Masayoshi Son's largest investment (holds 80% of the equity through Starburst 2, which was renamed to Sprint Communications).
2. Claure was appointed to the CEO position by Son, even though Claure was initially against becoming CEO (I don't see this as a substantial risk, however. Claure is very supportive of Son).
3. S has the lowest ebitda margins in the industry of ~20%, and Claure readily admits that and is straight-forward about improving margins (AT&T and Verizon have between 30-45% ebitda margins).
4. Claure has already implemented changes in S's value proposition (doubled data usage for Framily Plan, lowered cost to customers, offering iPhone 6 at a cheaper price than competitors, etc.).
5. 5,000 people have been fired.
6. Using ttm numbers, a pro-forma ebitda with a 30% margin gives me a fairly significant margin of safety.

Claure is a very successful entrepreneur who, 15 years ago created Brightstar Corp. by selling phones out of the back of his truck, and turned that into a company that generated $10 billion in sales.

Cheers,

Anthony

 
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