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Dan Jones

Who's Buying Clearwire Shares?

December 14, 2012 | Dan Jones | Comments (3)
   
  
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4:40 PM -- Have you noticed Clearwire LLC (Nasdaq: CLWR)'s rising stock price this last 48 hours?

The operator's share price is trading up $0.47 over the $2.90 price that Sprint Nextel Corp. (NYSE: S) has said it is offering to buy the rest of the company. (See Sprint Wants to Buy Clearwire Outright for $2.1B.)

As I write this, Clearwire is trading at $3.38 -- up 7 percent, or $0.22, for the day on Friday. Not bad for a stock that closed Wednesday at $2.75.

So why is Clearwire trading so high above the premium it has set for its buyout? There are three reasons I can think of:

  • Buyers expect a rival bid from another interested party. I should note that Clearwire didn't rule this out in its response to Sprint's bid. (See Clearwire Response to Sprint Talks.)
  • Buyers expect Sprint to up its bid. Clearwire shareholders are already complaining that the deal undervalues the company.
  • The buyers are idiots.

Anyone got any thoughts on what's driving the rally?

— Dan Jones, Site Editor, Light Reading Mobile
Newest Comments First       Display in Chronological Order
Dan Jones
User Ranking
Friday December 14, 2012 5:30:33 PM
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So when should people sell I wonder? What's the right peak?

FYI, I don't own any CLWR stock, just thinking aloud.

Jeff Baumgartner
User Ranking
Friday December 14, 2012 5:15:44 PM
no ratings

Clearwire was at about $1.54 when TW Cable revealed plans to sell its stake. Ooops.

Dan Jones
User Ranking
Friday December 14, 2012 4:54:43 PM
no ratings

Remember that Sprint already owns 51% of CLWR so bidding for minority control would seem a little odd...

The blogs and comments are the opinions only of the writers and do not reflect the views of Light Reading. They are no substitute for your own research and should not be relied upon for trading or any other purpose.
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