By 11:31 a.m. Eastern, the WiMAX service provider’s shares were trading 7.24 percent higher, at $6.07. In fact, Clearwire, along with Nokia Corp. (NOK), was leading telecom stocks. The news was good for Clearwire, which has had a roller-coaster relationship with Wall Street due to uncertainty over finances and other matters.
On Tuesday, investors were spurred on by two factors.
First, investment bank UBS upped Clearwire’s ratings from sell to neutral and doubled its price target to $6. That’s because Clearwire recently raised $920 million more to build out its network, easing fears over the provider’s ability to fund its business model.
“We have been concerned about Clearwire’s ability to finance its roll-out and the size of the WiMAX opportunity given the expected deployment of LTE-based services by Verizon and AT&T,” the broker wrote in a client memo. “The capital raise largely eliminates the funding risk while likely getting Clearwire running in additional markets sooner than expected.”
And thanks in part to the new financial stability, Clearwire has been able to act on its expansion plans. On Tuesday, the company said it now offers its retail wireless Internet service, named CLEAR, in 10 more major cities: Austin, Dallas/Ft. Worth and San Antonio, Texas; Charlotte, Greensboro and Raleigh, N.C.; Chicago; Honolulu and Maui, Hawaii; and Seattle/Puget Sound.
Clearwire expects its 4G network to reach more than 25 markets, covering more than 30 million people, by the end of this year.