Today's investment pushes Sprint's equity stake to 26.7 percent from 14.6 percent.
Shares of Earthlink surged $1.50, or 8.82 percent, to $18.50 in early trading.
More than two years ago, Sprint took a nearly 30 percent stake in EarthLink. But with the $4 billion EarthLink-MindSpring Enterprises merger that closed in February, Sprint's stake was diluted to 14.6 percent. According to the original agreement, Sprint has a right to maintain an equity stake of 28.7 percent in EarthLink.
Shares of EarthLink have fallen well below their 52-week high of $71.25, trading close to their low of $10.56. The stock closed yesterday at $17.
The $129 billion merger between Sprint and MCI Worldcom had cast doubts on how large a stake in EarthLink Sprint could control because of federal regulatory scrutiny. Earlier, to win regulatory approval for its merger with WorldCom, MCI had to sell off its Internet backbone assets.
Sprint had six months from the time the merger closed to buy additional EarthLink stock. The long-distance and wireless firm will continue to retain two seats on EarthLink's board.