Sprint Nextel Corporation (NYSE:S) shares sprint amidst speculations of acquisition

A spike in the shares of Sprint Nextel Corporation (NYSE:S) have fuelled speculation that the company could be considering an acquisition.

Earlier this month its Chie Executive officer Dan Hesse had told Bloomberg in an interview that consolidation would be constructive  for the industry and Sprint would play a role in that.

There has been a lot of speculation that Sprint could be considering a takeover of smaller rivals such as MetroPCS or Leap Wireless International, though there has been nothing official from the companies concerned.

After the disastrous takeover of Nextel, that crippled Sprint with incompatible networks, a diminishing subscriber-base and five years of losses, the company is on a path of resurgence.

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It has tied with up Apple for the sale of its new iPhone 5 that is seeing record sales with customers clamouring to get their hands on the device.

The stock has more than doubled this year to its current levels of $5.60 while cash reserves at $6.8 billion are near six-year highs.

Analysts feel that the appreciation of its stock more than negates its high debt level at $16.6 billion, which is more than the market capitalisation of the company.

Sprint is a distant third behind Verizon Communications Inc.(NYSE:VZ ) and AT&T Inc.(NYSE:T ) in the U.S. carrier market and is biding to catch up with them.

Dan Hesse who was hired in 2007 to effect a turnaround in the company is doing it in three phases. During the last four years the company has been put on the path to recovery by cutting employees by a third and developing a faster network deploying LTE.

This year and the next are the spending phase for the company. The third phase which will start after that will be devoted to growing the company.