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Brian Bleifeld is a CPA who has a hobby of analyzing markets for small inefficient behaviors. Markets Brian likes to investigate Financial, Sports, Social, Political Capital and Internet trends. Since some of his findings involve financial areas he posts content on Seeking Alpha. Brian is a... More
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  • Future for Clearwire is Now Clear - And it is Not Good  0 comments
    Nov 18, 2011 5:51 PM | about stocks: S, S, CMCSA

    Clearwire (CLWR) is slammed by Sprint over LTE and Wimax. Only sale of $20 Billion spectrum for full market value will save Clearwire.                    

    I have been a Clearwire (CLWR) customer for the last two years.  I own three devices (Home Modem, USB, and my favorite the CLEAR Spot 4G) and have been happy with the technical side of this company.  Since I live in sight of the Sprint/Clear tower I always have blazing fast connections.  The service is far faster and more reliable than the Comcast (NASDAQ:CMCSA) business class which seemed to have banker’s hours.

    That being said I knew this company was doomed to fail when I purchased my third device from them.  Customer service had always been weak, but the ordering of my CLEAR Spot 4G was an Epic Fail. First I ordered the item at Best Buy and that was my first mistake as I knew more about the product than the employees.  I expected the product in about for days and was excited when it came in only two.  I followed the instructions to get online and the device read as being canceled service.  The next day I found out why as two more of the CLEAR Spot 4G devices showed up on my doorstep.  One of those devices was connected to my account and worked fine.  When I called to find out how to return the other two devices no one at the company even had a record of me ordering any of the devices.  I asked and received a return shipping label and hoped the nightmare was almost over.  On returning the extra devices I checked my bill and all three devices were now set up with data plans totaling 150 dollars a month in addition to my other two devices.  When I again called to complain they deactivated the CLEAR Spot which I had in my possession and sent me yet a fourth device.   

    I knew then that the company was doomed even with a service I really loved.  It so nice not having to bundle a useless phone and cable to get internet.  It was nice to be able to take you internet with you.  If you cannot manage you logistics chain you are doomed to fail!

    So Sprint (NYSE:S) has decide to drop WiMAX and go LTE

    This means that Clearwire will not get the cash to expand the WiMAX network.  According to Mark Sullivan at PC World, Sprint (which owns a majority stake in Clearwire) is in a battle with Clearwire over control of the WiMAX network and spectrum.  Going to LTE means that the future of Clearwater is in danger.

    All of this came to a head Friday November 18th

    At 2:27 PM Clearwire (CLWR -20.4%) is considering whether to skip a $237M debt payment due Dec. 1, WSJ reports. With $698M in cash and short-term investments as of Sept. 30, Clearwire can afford to pay, but the company needs to raise lots of money if it is to stay in business after the next 12 months, so it's debating the unusual step of failing to make a payment.

    “Unusual step of failing to make a payment” is not something an investor wants to hear.  Accordingly Clearwater dropped 20% on the news. 

    As you can see this news tops off a horrible year for Clearwire.

    Seeking Alpha author Ganaxi Small Cap Movers on November 3rd tried to claim that since mobile broadband use is expanding Clearwire may “look attractive for the speculative investor”

    Today’s bombshell wipes out any residual desire in me to not only keep my CLEAR Services, but to even play in this garbage stock. I would not hope against facts that this stock will recover as a deal for old technology will not save the company.  I hope they sell the bandwith as soon as possible and hope to recover some of the money they lost investors.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
    Stocks: S, S, CMCSA
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