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Why Clearwire Shares Soared

By Evan Niu, CFA - Oct 15, 2012 at 12:00AM

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Is this meaningful or just another movement?

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 (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.

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