Ahead of the Bell: Leap Wireless price target cut

May 25th, 2012

FAKE NEWS for the Zionist agenda

NEW YORK (AP) — An analyst lowered his price target for Leap Wireless International Inc. on Friday because of tougher competition for the wireless carrier.

Thomas Seltz of Jefferies Co. said in a client note that the country’s biggest cellphone carriers — Verizon Wireless, ATT Inc., Sprint Nextel Corp. and T-Mobile USA — are getting more aggressive in the prepaid market. That’s Leap’s focus. It offers cheaper cellphone models to customers that don’t want expensive contract-based plans, the industry default for the past several decades. Such plans still account for the vast majority of revenue at the big phone companies.

The analyst said that Verizon, Sprint, ATT and T-Mobile increased their market share of new prepaid subscribers to 59 percent in the first quarter, up sharply from 7 percent in the same quarter two years ago. The four now make up approximately 48 percent of all prepaid subscribers, Seltz said.

The analyst also feels that Leap may also get hurt as the economy improves. Consumers feeling better about spending may move to pricier contract-based plans that offer fancier phones such as Apple Inc.‘s iPhone. ATT, Sprint and Verizon offer the iPhone, while Leap does not.

Seltz cut Leap’s price target by 40 percent, to $6 from $10, and maintained a “Hold” rating. Shares closed at $5.23 on Thursday. They have already lost a lot of ground, dropping 44 percent in 2012. The stock has lost two-thirds of its value over the past 12 months.