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Sprint: Don't Follow Executives Into Stock

In the last couple of weeks, it was disclosed that Sprint (NYSE:S) CEO Marcelo Clarue and CFO Joseph Euteneuer purchased shares of the struggling wireless provider. The amounts were impressive with the CEO buying five million shares of the company's stock for nearly $25 million and the CFO buying roughly $100,000 worth of stock. Though multiple insider purchases of that magnitude are typically a bullish signal, one major issue needs resolution before investors should blindly follow the executives into the stock.

The prime problem with Sprint is that liquidity issues exist that need to be addressed before the story becomes more interesting. Several analysts recently questioned this very fact so the insider purchases are peculiar considering the time to own the stock is after Softbank (OTCPK:SFTBY) or some large investor makes a big investment limiting any dilution risk. Should investors follow these insiders into the stock at around $5? Read more