Clearwire Agreement Opens Door for More Funding

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January 14 2011 @ 12:01

Clearwire Corp. may be inching closer to raising additional funds after the company disclosed this week that it had entered into an advisory services agreement with its newly appointed director, Benjamin G. Wolff.

Mizuho Securities analyst Michael Nelson told Reuters that investors interpret the agreement as a sign that Clearwire may have new funding in its sights.

In a filing with the Securities and Exchange Commission, Clearwire revealed that Wolff entered into an agreement in which he will be paid a fee if the company enters into a strategic transaction on which Wolff advised the company.

Clearwire needs additional investments as it builds out a national high-speed network based on WiMAX technology. In a November SEC filing, the company stated its cash and short-term investments could be depleted as early as the middle of 2011 if it did not obtain additional financing.

Clearwires chairman, Craig McCaw, recently stepped down from the company, raising concerns about the future of a company that is partially owned by Sprint Nextel.

As of Sept. 30, 2010, Clearwire had deployed networks that reached an estimated 70.5 million people, according to an SEC filing.