Sprint Nextel's Shares Surged: What You Need to Know

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of American telecom Sprint Nextel (NYS: S) sprinted to overnight gains as high as 13.8% in fairly heavy afternoon trading.

So what: Analyst firm BTIG Research released a report this morning, saying that recent fears about Sprint's financial condition are "overdone." That opinion also drew a sigh of relief from Clearwire (NAS: CLWR) shareholders, who currently largely depend on Sprint to stay alive and drive 4G network sales; Clearwire shares jumped as much as 10%.

Now what: Today's jump notwithstanding, Sprint shares have dropped 13% over the last week. The company recently made drastic changes to its data network plans that may leave Clearwire out in the cold -- and yes, will require very large capital investments that the company can't afford today. When elephants dance the way Verizon (NYS: VZ) and AT&T (NYS: T) are doing in the wireless market, tiny chickens like Sprint must run for their lives. I'm just not sure that Sprint is running in the right direction.

Interested in more information about Sprint Nextel? Add it toMy Watchlist.

At the time this article was published Fool contributor Anders Bylund holds no position in any of the companies discussed here. Motley Fool newsletter services have recommended buying shares of AT&T. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. You can check out Anders' holdings and a concise bio, follow him on Twitter or Google+ , or peruse our Foolish disclosure policy.

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