Why Clearwire Shares Popped

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  ) climbed 14% today after Sprint Nextel (NYSE: S  ) said it would acquire the remaining 49% of the wireless service provider it doesn't already own for $2.1 billion.

So what: The deal values Clearwire at $2.90 per share and represents a 20% premium to its Monday closing price (before rumors of the deal started to swirl and drive the price higher). Sprint is making the move to give it complete direct control of the embattled company, but with Clearwire shares currently trading above the offer price, Sprint might need to up its bid in order to secure the acquisition.

Now what: Clearwire shareholders should use today's above-offer rally to take at least some dough off the table. As my fellow Fool Anders Bylund noted earlier today, the chances of a higher offer from another telecom giant are slim to none given that Sprint is "the only American network that actually uses Clearwire's WiMax networking technology." So while it's certainly possible that Sprint may sweeten its own offer, holding out for a dramatically better price doesn't seem prudent.

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