Investor continues to pressure Sprint CEO
Activist investor Ralph Whitworth is taking aim at Sprint Nextel's CEO Gary Forsee, telling the Wall Street Journal that he has lost confidence in the company's management.
Activist investor Ralph Whitworth is continuing to put pressure on Sprint Nextel CEO Gary Forsee, according to the Wall Street Journal.
Whitworth, who owns about 2 percent of Sprint's outstanding stock, told the WSJ that he has lost confidence in Forsee. While he stopped short of asking for Forsee's resignation, he said he'd like to see the company's board of directors make some management changes to get the company back on track.
Whitworth is most concerned about Sprint's investment in WiMax, a wireless-broadband technology that would greatly increase data speeds. The company has committed itself to spending $5 billion by 2010 to build the network. Sprint said in August that it hopes it can also generate between $2 billion and $2.5 billion in annual revenue during this time. But Whitworth is concerned the company is not focusing enough on its core cell phone business, which has been steadily losing customers over the past few quarters.
While Sprint saw some improvement in the second quarter for attracting post-paid subscribers, overall the company has been struggling ever since its 2005 acquisition of Nextel communications. As a result, Sprint's stock has dipped 27 percent since the acquisition, the WSJ reported.
Whitworth has quietly been growing his stake in Sprint for months. In April, the WSJ reported he had about a 1 percent stake in the company. Now he has nearly 2 percent. Whitworth is seeking a seat on Sprint's board of directors.
Whitworth has seen success in pushing for change at other companies. He helped bring about Robert Nardelli's departure from Home Depot and helped push out Sovereign Bancorp CEO Jay Sidhu, the WSJ said.