Clearwire's Popularity as a Short Is Growing

The short base (as measured by the percent of shares outstanding on loan) in Clearwire Corp (CLWR) has risen over the past month by 14.17% to 0.95%. CLWR operates a wireless broadband network that provides services to nearly 400,000 subscribers primarily in the U.S. and Europe. The short base of CLWR is somewhat diluted because Intel Corp. (INTC) owns more than 18% of its shares outstanding.

Many believe that utilization (which measures the supply and demand in the securities lending market) can give a better indication of the ‘popularity’ of a short position. CLWR has a utilization of 69.88%, which has increased by 24.95% over the past month. CLWR’s share price is trading just under 5 dollars which makes it down only 1.22% YTD, but well off its high of $32.50 in July 2007.

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Comments

[Zenfar:]

I own a few shares of CLWR but the stock has been struggling. Cable providers need a wireless choice and CLWR has the potential to be that choice. But it will not happen overnight and thus the opportunity for shorts. When they cover they will own a great company. Atlanta is coming online and I think that is a major plus for CLWR. The days of the mobile computer are here, I can see most people carrying a netbook or smartphone with them at all times.

Long INTC, CLWR, PALM

Jun 30 09:31 AM

[Karen Mulvany:]

Some of the data provided by public databases on closely held ownership is a bit confused, probably because the total shares outstanding include both A shares and B shares (held by strategic investors). Check out Clearwire's most recent proxy statement (p.17) for clarity: as of Feb 28, Sprint alone owned 51% of the outstanding vote and other long term investors owned 39% of the vote, including Intel (13.2%), Comcast (8.5%), Eagle River (controlled by Craig McCaw 5%), Google (4.1%), Time Warner Cable (4.5%), Motorola (2.3%) and Bell Canada (1.8%). That leaves only 10% of the outstanding shares for float. Consequently the short interest at 1% of the outstanding shares amounts to 10% of the float.

Jun 30 02:10 PM

[The Stock M...:]

Its like we said - seekingalpha.com/artic...

Buying CLWR is taking a leap of faith and even at $5 a share its risky, read the full story at our site -- thestockmasters.com

Jun 30 07:04 PM

[contrariwise:]

Hmm... seems to me that short interest is declining...

www.nasdaq.com/aspxcon...

Based on the NASDAQ data - declining short interest, declining volume and rising days to cover - I would think that the facts contradict the author's thesis. CLWR just started mobile WiMAX coverage in Atlanta. Not sure where things will wind up in the long run but in the near term this looks to me like a very dangerous stock to be short of.

Jul 01 06:22 PM

[contrariwise:]

The 3 month chart circa today (July 7th) shows a cup formation. Cup & handle is bullish...

Jul 07 07:47 PM