No Need to Run, but Sprint Investors Should Prepare for Exit

What's a Sprint Nextel shareholder to do?

Shares of the No. 3 U.S. wireless carrier have risen 104% over the past 12 months as the company has started selling the iPhone, refinanced its debt and made progress shutting down the Nextel network. Now Softbank has agreed to buy a 70% stake. Sprint shareholders will get $7.30 a share in cash for 55% of the company's shares and a share in new Sprint for the remaining 45%. Softbank will also inject $8 billion of new capital. It isn't a bad outcome, considering some analysts considered Sprint at risk of bankruptcy as recently as a few months ago. But the complicated deal and the diminished voting power that comes with it may leave investors wondering whether to bail once the deal closes or stick it out to see how a better capitalized Sprint will fare. There remains an outside chance that a powerful buyer, such as Mexico's Carlos Slim, makes a late counter bid. But if not, investors should expect to hang up on Sprint's stock when Softbank completes the deal.