Virgin Mobile's First Analyst Call...A Sell (VM, S)

Virgin Mobile USA (NYSE:), Richard Branson’s recent pay as you go cellular carrier IPO, managed to pick up its first analyst coverage today.  Stanford Group Company was not in the underwriting syndicate, but the boutique is the first brokerage to initiate coverage.  It issued a "Sell" rating.  A call into Stanford confirmed the coverage, and a director of equity research confirmed that analyst Michael Nelson picked up coverage as a Sell rating with a $10.00 target.

The underwriter quiet period has not yet ended, so the analysts that got a closer look into the company are still a few weeks out from being able to issue their research calls.  We won’t see these notes from underwriters until November.  The book runners in the underwriting were Lehman, Merrill Lynch, and Bear Stearns; and co-managers were Raymond James and Thomas Weisel.

Virgin’s carrier partner Sprint Nextel (NYSE:S) has also been in the soup lately.  Shares are indicated about 1% lower today, but they are down about 10% since the IPO. 

Jon C. Ogg
October 18, 2007