Shares of Clearwire Corp. dropped more than 7 percent in midday trading on Thursday as the WiMAX operator said it intends to raise more than $1.1 billion through a private debt offering.
Clearwire is so strapped for cash that it has laid off 15 percent of its workforce and halted expansion plans in several key markets. As of a month ago, analysts and other industry observers wondered if Clearwire would have enough liquidity to get through the end of the year the providers had just $1.4 billion in cash and investments for the remainder of 2010, and still aimed to spend $3.3 billion on buildouts in November and December.
Now Clearwire hopes to secure enough money to get it through the next three or four quarters. Jonathan Chaplin, analyst at investment bank Credit Suisse, called the development a major positive,” in a client memo. Chaplin also expected Clearwires shares to rise on the deals news, and they did, for a while. By 12:34 p.m. Eastern, however, the Washington state-based companys stock had fallen 50 cents to $6.32.
A number of people are wondering what the situation means for Sprint Nextel Corp., Clearwires majority stockholder. Sprint has its own money troubles and if it goes too deep into the Clearwire offering, risks more indebtedness than it may be able to handle.
Meanwhile, Clearwire said it has nominated three candidates to fill the open seats on its board. The contenders are William Blessing, a smart grid and telecom consultant; Mufit Cinali, a private equity managing director; and Hossein Eslambolchi, a technical adviser to Ericsson and the University of California School of Engineering.
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January 22 2019 @ 22:01:08 UTC