Say it ain’t so. Virgin Mobile USA is one of the few remaining US-based MVNOs that we actually like. With innovative pricing schedules and attractive mobile phone offerings, Virgin Mobile USA deserves a special place in our hearts. Unfortunately, the US stock market didn’ reciprocate that sentiment. Virgin Mobile USA’s stock has lost more than 85% of its value since the company went public. The Virgin Mobile USA IPO was shrouded in scandal as the company mis-reported financial statements prior to the IPO.
According to VentureBeat, Virgin Mobile USA management is considering laying off upwards of 300 employees to help stem losses associated with poor performance in the stock market. The job cuts would leave mobile virtual network operator’s (MVNO) North American operations in jeopardy.
Part of Virgin Mobile USA’s troubles are rooted in other US carriers’ adoption of pre-paid pricing schedules similar to Virgin Mobile USA’s innovative pay-as-you-go plans.
And, in the face of plummeting stocks, Virgin Mobile USA’s four top executives took a pay raise of 30% to help offset their almost worthless share-holdings.
So, what’s to happen to one of the few MVNOs that have actually been able to claim even a modicum of success? Private equity firms have been reportedly shown interest in Virgin Mobile’s US operations, but the MVNO’s joint partnership with Sprint would make any potential buy-out difficult. For now, the company may outsource operations to IBM following any lay offs.
[Via: VentureBeat]