A Cheap iPhone, the Clearwire Acquisition Drama, and the Battle Over Herbalife

The following video is from Wednesday's MarketFoolery podcast, in which host Chris Hill, as well as analysts Tim Hanson and Joe Magyer, discusses the top business and investing stories.

In today's episode, Apple (NASDAQ: AAPL  ) may release a lower-cost iPhone, potentially to the brand's detriment; DISH Network (NASDAQ: DISH  ) has offered to pay more for Clearwire (UNKNOWN: CLWR.DL  ) than Sprint (NYSE: S  ) which further complicates the acquisition drama and has shares of Clearwire up; and two hedge fund managers and activist investors compete in the battle over Herbalife (NYSE: HLF  ) , and one may come away severely financially damaged.

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  • Report this Comment On January 11, 2013, at 3:48 PM, spokanimal wrote:

    The Dish bid for Clearwire is far more influential than most people realize.

    Many who are under-informed think that because sprint owns 51% of clearwire, that any counter-bid is futile.

    In reality, Sprint can't buy the rest of clearwire unless it can secure 50% of the support of minority shareholders... and that support simply isn't there, even if Intel and Comcast vote for the bid.

    Most long-term, minority shareholders DESPISE Dan Hesse for the 2-year campaign he has waged to drive the share price of clearwire down into the gutter... simply so he could buy the remaining shares from clearwire's screwed minority shareholders for pennies on the dollar.

    Not only is sprint's offer ridiculous on the face of it... but there are a lot of shareholders who wouldn't support a sprint bid at ANY price below clearwire's net, liquidating value.

    Further, the FCC is understandably loathe to approve a merger that gives a foreign company (softbank) control over more spectrum than AT&T and Verizon COMBINED. The Dish bid gives the FCC an avenue by which to diversify the ownership of clearwire's spectrum and keep wireless providers on an even footing... much less devalue the market value of spectrum in such a way that it would damage any future government auctions.

    The Sprint bid of $2.97 is effectively dead.

    What remains is a miriad of potential outcomes... all of which punish clearwire's minority shareholders less than the ridiculous sprint bid that culminated 2 years of full-on, clearwire stock manipulation.

    S.

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