Shares of Clearwire Corp. jumped 23.3% to $24.50 in normal trading Thursday, nearly matching their early March Nasdaq debut close. Clearwire announced WiMax (wireless) high-speed internet and video distribution agreements with satellite TV operators DirecTV and EchoStar Communications, in a launch scheduled for later this year. In addition, The Wall Street Journal reported sources say a partnership with Sprint Nextel -- the only other firm building a WiMax network in the U.S. -- is a possibility, noting there have been negotiations between the parties for months. DirecTV and EchoStar will be able to offer Clearwire's internet services on both a bundled and stand-alone basis. Reuters reports analysts say Clearwire's internet access speeds are unlikely to be competitive against cable broadband. Also, one analyst notes combining the networks of the three companies will put them at a cost disadvantage to cable's single network bundle. Shares of DirecTV rose 2.7% to $23.48, while EchoStar was unchanged at $44.93 and Sprint lost 0.8% to $21.99.
Sources: Press release, CNET, Reuters, Wall Street Journal
Commentary: Sprint Nextel Seeks Help With WiMax -- WSJ • Clearwire: Too Much Hyperbole For a First Time Earnings Report • Clearwire: Opinion Appears Split On Potential Profitability
Stocks/ETFs to watch: Clearwire Corp. (CLWR), EchoStar Communications Corp. (DISH), DirecTV Group Inc. (DTV), Sprint Nextel Corp. (S). ETFs: iShares Dow Jones U.S. Telecom. Index (IYZ), PowerShares Dynamic Telecom. & Wireless (PTE)
Conference call transcripts: DIRECTV Q1 2007, EchoStar Comm. Q4 2006, Sprint Nextel Q1 2007
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