Clearwire Shares Popped: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of WiMAX specialist Clearwire (Nasdaq: CLWR  ) rose as much as 13% in intraday trading on heavier-than-average volume.

So what: There seemed to be some excitement over the announcement that Sprint Nextel (NYSE: S  ) -- Clearwire's majority owner -- will start selling Research In Motion's (Nasdaq: RIMM  ) BlackBerry PlayBook tablet. Some reports said there was optimism that this could lure consumers away from Apple and its partner AT&T (NYSE: T  ) because of the all-you-can-eat 4G data service that Sprint and Clearwire are expected to offer. Also making rounds were some reports suggesting that the relationship between Sprint and Clearwire is still strong. Questions about the relationship came up when Sprint pooh-poohed Clearwire's branded retail strategy and then opted to pass on participating in Clearwire's recent financing.

It seems hard to believe that either of these items triggered the big gains today, but the two together -- perhaps along with bargain hunters sniffing around the stock after it endured a miserable year end -- could have contributed to the pep.

Now what: Given the recent slide in Clearwire's stock, today's action is no doubt a relief for shareholders. But looking ahead, big challenges still remain. Unlike Sprint, which has had problems of its own, Clearwire is not only unprofitable, but is also burning through cash. A continued positive relationship with Sprint as well as new opportunities through new Sprint offerings like the PlayBook are positives for Clearwire, but the stock still remains a highly speculative play.

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