Warren Buffett and John Malone are considering investing in mobile phone carrier Sprint Corp. This investment would be a sizable one as well, going between $10 billion to $20 billion. This report comes from certain people close to the company who are familiar with the matter. Masayoshi Son, the CEO of SoftBank Group Corp, which controls Sprint, has even met with Buffett and Malone over this impending investment. It is also known that Sprint CEO, Marcelo Claure was also involved in these negotiations.
Buffett and Malone looking to invest in Sprint Corp
The businessmen all met over the weekend at an annual event held for business magnates and moguls, where the talks about this possible investment were brought up. Buffett’s Berkshire Hathaway is looking to invest close to $20 billion in Sprint. However, the exact amount of money that Malone’s Liberty Media will invest has not yet been revealed. It was reported by the sources that the talks are currently at the very early stages and nothing is finalized as of yet.
As soon as news about this possible investment was made public, the stock prices for Sprint Corp peaked by 4.3 percent at $8.55 on Friday, July 14. The company has a market cap of $32.75 billion.
However, both SoftBank and Sprint refused to comment on the meeting with Buffett and Malone regarding the investments. Berkshire Hathaway and Liberty Media also did not comment on the matter.
How would the investment help the carrier
The huge investment if finalized will give Sprint a lot of breathing room since it would not have to worry about the debt that it owes so much and instead can focus on improving the network quality.
The company stands at the fourth ranking when it comes to the overall internet speeds after Verizon, T-Mobile, and AT&T. The investments would let it better compete with the fierce wireless mobile connections that are prevalent in the United States.
This deal would also relieve the undue pressure of striking a deal with T-Mobile, for which Sprint has held talks previously.
Investors have always expected that at some point or another Sprint and T-Mobile will enter into a deal, despite the regulatory issues. However, in June reports surfaced which stated that Sprint had entered into investment talks with Malone’s Charter Communications Inc and Comcast Corp. this had put any deals between the carrier and T-Mobile temporarily on hold.
Whether the deal will go through or not is unknown as of now, but such a sizable investment will help Sprint out a lot. The carrier would be able to use the additional asset to refine its network so that it can compete with the likes of Verizon regarding signal strength and internet speeds.
