Management Turnover as Change Agent

Tuesday, December 18, 2007

CEO Watch - Sprint Nextel Update 3, New CEO Appointed

Sprint Nextel Corp S (NYSE) selected Embarq Corp EQ (NYSE) CEO Dan Hesse as its new president and chief executive. Hesse, 54, is somewhat familiar with Sprint. He worked at the company's local phone service division for a year before it was spun off to create Embarq. A number of analysts considered Hesse a potential candidate to replace Gary Forsee, who resigned as Sprint CEO in October. Forsee left the firm after the company bled customers for more than a year and lost market share to rivals.

Hesse's appointment seems to have been a safe choice. It's unclear whether safe is exactly what Sprint really needs at the moment. At least the waiting is over and the company can now start to move on to make the necessary decisions to try and get itself back on track. Hesse's appointment comes after it became known that Sprint rejected a $5 billion offer after it had been approached by former Sprint Chairman Tim Donahue, South Korea's SK Telecom Co Ltd and Providence Equity Partners.

Investors need to keep an extremely close eye on Hesse and his team as we move forward. Sprint remains in trouble and we will just have wait and see what the new management can do to reverse the firm's problems.

For more:

CNN Money
Red Herring
Deal Journal
Barron's Tech Trader Online
Kansas City Business Journal
Kansas City Star
24/7 Wall Street

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