Sprint to Purchase More EarthLink Shares

Sprint Corp. plans to increase its stake in EarthLink Inc., the second-biggest U.S. Internet access provider, to nearly 27% by buying 26 million additional shares for $431 million. At $16.58 each, the purchase price is 2.5% below EarthLink’s closing price Monday. EarthLink shares rose $1.44, or 8%, Tuesday to close at $18.44 on Nasdaq. Sprint originally owned 29% of EarthLink, though that was cut in half when Pasadena-based EarthLink merged with MindSpring Enterprises Inc. in February. EarthLink, now based in Atlanta, said Sprint’s investment, which follows recent research reports showing that some Internet companies don’t have enough money to stay in business for long, will boost its cash reserve by 64% to $1.1 billion. EarthLink, which has more than 3.4 million subscribers, will use the Sprint investment to boost growth through advertising and acquisitions, Jefferies & Co. analyst Fred Moran said. Sprint fell 38 cents to close at $59.88 on the New York Stock Exchange.