Why Clearwire Shares Soared

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 Clearwire (Nasdaq: CLWR  ) have soared today by as much as 28% on news that Japanese carrier Softbank was acquiring a majority stake in Sprint Nextel (NYSE: S  ) .

So what: It's a $20.1 billion deal that gives Softbank a 70% stake in Sprint, while Sprint remains Clearwire's largest investor and customer. The deal that's been announced doesn't directly involve Clearwire beyond its existing relationship with Sprint, but there are hopes that eventually Softbank may be interested in acquiring it as well.

Now what: Softbank CEO Masayoshi Son stoked speculation when he said that "anything can happen" regarding future acquisitions, without elaborating any further. Clearwire has valuable spectrum holdings that would be a large consideration for any possible deal. Additionally, Clearwire is preparing to deploy a TDD-LTE network next year, which is the same 4G network technology that Softbank uses in Japan.

Interested in more info on Clearwire? Add it to your watchlist by clicking here.

Evan Niu, CFA, has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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  • Report this Comment On October 15, 2012, at 4:44 PM, spokanimal wrote:

    Sprint has stated that their deal with softbank includes no expectations that sprint do a deal with clearwire...

    ... which is EXACTLY what I would say if my intention WAS to do a deal with clearwire but I wanted to stem the expectations that are built into a clearwire stock price that is rocketing higher.

    Barack Obama told the Taliban that he's leaving Afganistan in 2014 so that they can wait until then to take the country back over...

    ... I hardly believe that Dan Hesse would be that stupid in signaling his intentions to Craig McCaw... the clearwire investor that has so much say over major organizational issues such as this.

    Spokanimal

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