Sprint Nextel Corp. (NYSE:S) shares rose $0.79, or 4.21%, to $19.55 during today's session on news that activist investor Ralph Whitworth is turning up the heat on chief executive Gary Forsee and other directors. Shareholders are hoping that the activist can help implement change in the nation's third largest wireless carrier, which has both lost customers and seen its shares drop 27% since its 2005 acquisition of Nextel.

Ralph Whitworth said in an interview that he has "lost confidence in Gary Forsee ... primarily because of management's inability to forecast the company's results and their apparent inability to address the fundamental issues surrounding the core business." Those close to the situation say Whitworth has been pushing for a meeting with the board before the company's annual strategic-planning weekend early next month.

Many of these investors have concerns over the company's WiMax initiative in which the Sprint plans to dump over $5 billion into by 2010. While the company hopes to realize $2 billion in revenue by that time, many are skeptical and have expressed concerns about such a large investment in an emerging technology and platform.

Meanwhile, Sprint claims that it is ontrack for a turnaround with a small 16,000 increase in "post-pay" subscribers, which are its highest valued segment. But many investors and analysts are not convinced that the company is back on track - at least enough to justify the giant new WiMax project. In the end, an activist like Whitworth may be able to talk some sense into the company and ensure that shareholder value is preserved. This makes S a stock worth watching!

Related Companies
Verizon Communications (VZ)
AT&T Inc. (T)
Qwest Communications (Q)