Poor plans beget poor results

摘要

Luring credit-challenged customers to standalone wireless operators labouring under exorbitant debt loads doesn't sound like an intuitive recipe for success. But that's exactly how Leap Wireless and several struggling Sprint PCS affiliates positioned themselves, and now they're paying the piper for their foolishness. To no one's surprise, CDMA operator Leap Wireless filed for Chapter 11 bankruptcy reorganisation on April 13th, 2003, days before announcing net losses for fiscal 2002 of almost $665 million. The operator, which ended 2002 with 1.5 million customers in 40 markets, saw its liquidity problems exacerbated on August 8th, 2002, when it lost a binding arbitration ruling that required it to give the defendant some 21 million shares of Leap common stock. Leap's stock was subsequently delisted from NASDAQ.