THE ROLLER COASTER: Sprint Nextel Corp.’s stock fell 20 percent after rising as much as 13 percent earlier in the day. Clearwire Corp.’s stock fell 32 percent.
THE ANNOUNCEMENT: Sprint investors liked it when the company said it will stop selling devices compatible with Clearwire’s current network after it switches on its own higher-speed data network. Sprint is Clearwire’s largest customer.
THE CAVEAT: Sprint will need to raise more money to build the network. The company also failed to offer earnings guidance that incorporates the effect of the iPhone, which the company must spend money on to subsidize to customers.