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Clearwire's Rumor Ride

It has been a rumor run for Clearwire LLC (Nasdaq: CLWR) over the last month with speculation about the company driving its stock price up and down through the course of April.

The firm's shares started the month at $15.22 but have been turbulent since the CTIA show passed without a long-rumored renewal of the partnership between Sprint Corp. (NYSE: S) and Clearwire being re-established. (See Clearwire Q4 Drops, WiMax News Doesn't.) They eventually hit a monthly low of $13.07 on April 18. During the later half of the month, the shares have made a generally shaky climb back up. The most recent peak was at $15.56 on April 23 and shares are currently trading around $15.20. Trading, however, has been lower in volume than in previous months.

Tuesday's trading was typically up and down for Clearwire:

Hills and valleys are nothing new for Clearwire, however, as the six-month view shows: CLWR, Half-Year View All of the recent movements for Clearwire's shares appear to be driven by speculation about the company's future in WiMax and possible buyers. Eric Kainer at ThinkEquity LLC expects that the fluctuations will continue for the time being.

"It will carry on until there's an announcement, one way or another, about Clearwire and Sprint," he says.

Clearwire itself says it is policy not to comment on rumor and speculation. "I know there's been a lot of coverage but I can't comment," a Clearwire spokeswoman says.

The rumors about the WiMax partnership suggested it would be funded by Comcast Corp. (Nasdaq: CMCSA, CMCSK), Intel Capital , and Google (Nasdaq: GOOG) to the tune of $4 billion or so. [Ed note: Chump change, really!] The expected deal didn't get announced during the CTIA show between April 1 and April 3, however. (See Clearwire & Sprint: On Again?)

Unstrung has heard from financial sources that the deal got off track because of internal politicking between the companies and investors about who would have control over the joint venture.

Kainer still thinks that a joint venture is the most likely outcome, although he's not 100 percent certain which companies are involved in backing the venture. Nonetheless, he believes that Clearwire and Sprint can more easily deploy WiMax in tandem and it is most cost effective for Comcast.

"Certainly we’re a day closer to hearing something; my expectation is that they will announce something before June," he says.

The companies said to be involved aren't talking, however. Sprint even put the kibosh down on any Clearwire questions before the start of its WiMax event in Vegas. (See Sprint Quiet on WiMax Launch Date.)

Clearwire's stock, meanwhile, took a drop last Wednesday after it became clear that Comcast is pulling out of the Pivot venture with Sprint. (See MSOs Pivoting Away From Sprint JV.) But the little stock that could started to climb again on Thursday.

Why? One financial source Unstrung spoke to suggested that rumors were out that Comcast wanted to buy Clearwire, although he thought this was "not credible." In fact, everyone Unstrung has spoken to thinks that the suggestion of a buyout is beyond the pale.

A report from Gigaom that Comcast was considering creating its own wireless division appears to have put paid to that little rally.

ThinkEquity's Kainer doesn't think Comcast would either buy Clearwire's regionally deployed wireless broadband network or build its own.

"Do you think that's credible?" he asks. "It would cost them north of $5 billion to deploy the network... and still take more than a year before they could deploy the mobile triple play services they want."

Nonetheless, he thinks that report that Dave Williams, lately CTO of Telefonica O2 Europe, has been hired by Comcast shows that the operator is serious about wireless: "The hiring of Dave Williams, if it is true, speaks to the level of expertise they need."

Comcast hasn't returned calls for comment on the market talk.

As for Clearwire, its stock fell again last Friday morning and into early afternoon but banked up to $15.43 in later trading and leveled off at $14.94 at close. The shares steadily climbed through Monday and Tuesday, peaking at $15.32, and are hovering around $15.27 on Wednesday morning as the rumors keep coming.

Look for more speculation on partnerships through early May as both Clearwire and Sprint are reporting their first quarter numbers on Monday, May 12.

— Dan Jones, Site Editor, Unstrung

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