Sprint-Nextel’s stock has plummeted in the last year and now can be had for under $3 a share. The market cap of the company is now under $7 billion and it has been losing money for the last couple of quarters. Sprint-Nextel has many issues with the largest being the high rate of customers that are leaving for other wireless providers. While these are large problems that need to be fixed, the net worth of the company without any customers is worth significantly more than its current market cap. How is this possible? The answer is the network and spectrum that Sprint-Nextel owns. Many in the wireless industry believe Sprint-Nextel’s ownership of spectrum in the 1900Mhz and 2.5Ghz bands to be worth easily tens of billions of dollars. This is just the FCC licenses without the cellular network which would cost many more billions to replicate. This leaves Sprint-Nextel as an exceptional buy for any company wanting to get into the wireless arena. The wireless arena will continue to be the hot ticket far into the future as today’s generation expects the Internet to be mobile. It would be much cheaper for a company such as Google to buy Sprint-Nextel than to deploy its own network. While the world economy is just beginning its journey through a black hole which will probably last many years, the opportunity to pick up a company at a fraction of its value in a high growth and evolving industry is very very rare.
A product to save Apple’s revenue in these hard economic times is a new generation iBook. This time around the iBook isn’t going to be a laptop, but instead a netbook. Netbook’s are plenty powerful enough to run 99% of what people need in a computer. If iPhones can fit the needs of consumers who surf the net and check email, then a netbook shouldn’t have any issues. Apple’s new iBook will be a more upscale than the current netbook’s on the market and should launch at $599. It will likely be powered by an Intel Atom 330 processor or a newer version of this dual core mobile chip. The other likely specs include a 9” or 10” screen, 2GB of memory, 20GB SSD drive, iSight, and Apple’s recently launched multitouch touchpad. It should arrive on the mid 2009.
The economy currently is very sour, and much worse than anyone had anticipated. Back in March I predicted that the Dow would end the year at 10600, and people at that time called me crazy! Never has there been such a globally economic meltdown, and the times we are currently living through are historic. This slowdown is going to have a large effect on companies that sell “luxury” items such as Apple. Consumers are looking to save money, and purchasing Apple products doesn’t fall in this category. Apple and other “luxury” based companies are going to need to down-market some of their merchandise to stop the revenue bleeding.
For one of my classes, Experimental Writing, I made a Children’s Storybook with a focus on weather and nature. I thought I might as well post it since I thought it was interesting and fun project:
