Leap Wireless Shares Surged: What You Need to Know

Motley Fool Staff

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 prepaid wireless service provider Leap Wireless International (NAS: LEAP) made good on its name today, leaping as much as 19.1% on absolutely crushing trade volume.

So what: Last night's third-quarter report put pep in the Cricket network owner's step. Churn is lower, subscriber additions are trending up, and revenue is on the rise.

Now what:Direct rivalMetroPCS Communications (NYS: PCS) fell through the floor due to a report as disappointing as Leap's was inspiring. The secret spice in Leap's recipe comes from smartphone sales and Muve Music devices, both of which are driving customers to choose feature-rich products tethered to more profitable service plans.

This, of course, is hardly a unique strategy: Verizon (NYS: VZ) and AT&T (NYS: T) have been milking the smartphone cow for years, and Sprint Nextel (NYS: S) hopes to tap into that rich vein with brand-new iPhone sales. Smartphone sales accounted for 50% of total sales this quarter, so Leap is clearly executing on the high-value vision.

Interested in more info about Leap Wireless? Click here to add it to My Watchlist.

At the time thisarticle was published

Copyright © 1995 - 2011 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.