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

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.

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