Clearwire's Cash Craving

Wireless broadband startup floats for $600 million

Dan Jones, Mobile Editor

March 8, 2007

2 Min Read
Clearwire's Cash Craving

Will $600 million in new capital be enough for Clearwire LLC (Nasdaq: CLWR)?

Maybe not. The wireless broadband operator has priced its initial public offering and is hoping to raise up to $600 million in a float on Thursday.

The company says that it is offering 24 million shares on the Nasdaq at $25 a share today. The operator laid out more details in an S-1/A filing with the Securities and Exchange Commission (SEC) on Wednesday.

But even after the IPO, the company is expecting to have to raise more capital to cover the massive expense of building and upgrading a mobile broadband network, which currently uses so-called "Pre-WiMax" technology, in the U.S. and elsewhere. The company says that it will need around $800 million to cover its costs in fiscal 2007 -- not including expenses related to buying more spectrum. (See AT&T Sells Spectrum to Clearwire.)

"We do not expect to satisfy all of our long-term capital and spectrum acquisition needs through this offering," the filing says. "We believe our cash and short-term investments afford us adequate liquidity for at least the next 12 months, although we may raise additional capital during this period if acceptable terms are available."

Clearwire has said that it will try and build out more mobile WiMax capabilities as soon as possible and start offering a PC card to users sometime this year. This will take the firm directly into competition with Sprint Corp. (NYSE: S), which plans to start offering commercial mobile WiMax services in 2008.

Clearwire initially tried for an IPO back in June 2006. The operator backed off ffrom this course when Intel Corp. (Nasdaq: INTC) and others provided the operator with an additional $900 million in funding. (See Clearwire Takes Another Cut at IPO.)The IPO has ten underwriters, including Merrill Lynch & Co. Inc. and JPMorgan Partners . The company will trade on the Nasdaq under the ticker symbol "CLWR." (See Clearwire Wants $480M in IPO.)

Even though market conditions are rather downbeat at the moment, industry watchers are still expecting Clearwire to be a crucial IPO in the technology sector.

"The feedback that I get from my sources is that its a hot issue, the only question is how hot," comments John Fitzgibbon, Jr., publisher of IPOScoop -- a site dedicated to tracking market floats.

— Dan Jones, Site Editor, Unstrung

About the Author(s)

Dan Jones

Mobile Editor

Dan is to hats what Will.I.Am is to ridiculous eyewear. Fedora, trilby, tam-o-shanter -- all have graced the Jones pate during his career as the go-to purveyor of mobile essentials.

But hey, Dan is so much more than 4G maps and state-of-the-art headgear. Before joining the Light Reading team in 2002 he was an award-winning cult hit on Broadway (with four 'Toni' awards, two 'Emma' gongs and a 'Brian' to his name) with his one-man show, "Dan Sings the Show Tunes."

His perfectly crafted blogs, falling under the "Jonestown" banner, have been compared to the works of Chekhov. But only by Dan.

He lives in Brooklyn with cats.

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