Be Smart

After a disappointing financial report, shares in Virgin Mobile USA fell by a massive 54-percent yesterday amid analyst negativity and poor subscriber figures.  Contrary to expectations, Virgin's subscriber growth for this quarter is being estimated at just 5,000 to 20,000, compared to 210,000 net additions in Q4 2007.  The already significantly weakened share price has fallen further; Virgin commanded a $15 share price back in October during its first public offering, but dropped $1.90 with the news of its stalled performance to a miserable $2.30. 

"With 2 quarters in a row of disappointing guidance we believe that the softening economy and increased competition have eliminated management's ability to forecast its business" Phil Cusick, analyst, Bear Stearns

Sprint, who sells Virgin Mobile the network space and owns an eleven percent share in the MVNO, saw its own shares fall by 3.5-percent to $6 after the news broke.  Bear Sterns analyst Phil Cusick cast doubt on the likelihood of a buy-out of Virgin - "We see no reason any competitor would buy Virgin Mobile's equity" - seemingly suggesting that there's not that much to buy.

Analysts had predicted Q1 2008 growth of 130,000 customers, and adjusted earnings before interest, tax, depreciation and amortization (EBITDA) of $142.8m; Virgin now forecasts an EBITDA of $105m to 130m.

[via Engadget]