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In an FAQ about the Sprint (S -1%) deal, Clearwire (CLWR +0.9%) hints the transaction could lead...

In an FAQ about the Sprint (S -1%) deal, Clearwire (CLWR +0.9%) hints the transaction could lead to layoffs. Meanwhile, activist investor Crest Financial, which is staunchly opposed to the deal, says it now owns 8.34% of Clearwire's Class A shares, up from a prior 6.62%. But with shares trading nearly 3% below Sprint's $2.97/share offer price, the Street isn't currently betting on a higher bid arriving. Comcast and Intel say they'll sell to Sprint at $2.97 regardless of whether the deal goes through. (more)
Comments (5)
  • ashtarir
    , contributor
    Comments (87) | Send Message
     
    Is Crest Financials 8.34% ownership even enough to stop the sale? Would they be doing investers holding this stock by preventing the sale when there are no other offers on the table, no way sprint would let other offers go through, and very little money left to continue operations? I think Crest Financial is setting themselves up for a lawsuit of their own. Talk about looking out for your own interest only. They must have lost so much money on this investment that they are willing to loose it all.
    19 Dec 2012, 12:51 PM Reply Like
  • AggGrow
    , contributor
    Comments (187) | Send Message
     
    I applaud Crest for trying to get a better deal. There's no basis for a lawsuit against them that I can see. It would be judged frivolous. Furthermore, Sprint is not going to let Clearwire go anywhere else.

     

    While we've seen the arguments that the high frequency spectrum is just not as valuable as 700MHz, I think exactly the opposite is true. Prices of base stations are dropping like rocks as carriers and NEPs try to maintain competitive advantage. You may truly need 7x the base stations at the higher frequencies, but, given Shannons Law, you will have 3.5x the available bandwidth per MHz, and far more clear MHz to use. What this boils down to is: If you want to deliver multi-megabit video quality speed to more than a few users per pop - forget about 700 MHz - it just won't scale - ever!

     

    That means, the real future lies in >2GHz. Period. There is really no question about this - only negotiating posture. Sure, you need more AP's but they're far less that 1/7th the cost of c.2005 base stations and profound cost reductions are clearly coming. And think about how you can better tailor coverage, particularly in urban environments.

     

    The future is in high frequency, low cost, WiFi enhanced base stations at >2GHz, and Clearwire currently owns a big chunk of that real estate. All investors are asking for is honesty and a fair deal.
    19 Dec 2012, 01:18 PM Reply Like
  • ashtarir
    , contributor
    Comments (87) | Send Message
     
    I'm arguing the fact that over the last 2 years they havent done a thing to improve their operatioin while sprint has spent billions to keep them operating. Do you not agree that 1) there are no other offers on the table, 2) no way sprint would let other offers go through with out rasing their own bid, and 3) CLWR has very little money left to continue operations. If Crest wants more money then then need to find another bidder who is willing to spend over 10B (@ lets say somwhere around in the LOW range of 5 dollars a share) to gain spectrum and 4B in high interest debt.

     

    Just ask all the other minority share holders that have agreed to sell what their options are. Wouldn't you think a company like Intel has enought cash on hand to outbid Sprint. Sure they do but its not just the spectrum that makes a company its what you build with it! So far CLWR has done nothing and their existing business and technology is running on fumes. If you want to see what CLWR has established for themselves just google CLWR reviews and read how unsatisfied people are with service and coverage. Yes most of their customers dislike them!

     

    Crest is putting themselves in a lose-lose situation and IMHO Sprint is in a win-win/lose situation (I think there is a plan B for sprint and it involves Dish Network and their investment in CLWR debt). The only statement they are making is that CLWR could be, should be, but isn't worth more than $2.97. If they can fight this buyout off (which i doubt) and CLWR goes under (which they most likely will) then what does that leave Crest and all other non class A share holders............0. If that were to happen anyone who owns CLWR debt will probably make out well (Dish) especially if they have an agreement in the works for someone to help them build a network (Sprint).
    I understand where your comming from but I had good reason to sell at $3.03 on Monday with reasonable profits. I was long CLWR until Monday and was look forward to someday selling at $10 or more. Unfortunately CLWR management didn't get me anywhere close to that and this deal is now the next best thing for both companies.
    19 Dec 2012, 02:36 PM Reply Like
  • zanajohn1
    , contributor
    Comments (76) | Send Message
     
    Here's the "fiduciary duty" case, not against CLWR's "special spectrum committee" but against CLWR's Chairman.

     

    Stanton has performed as a "place holder" for Hesse from his beginning as head of CLWR. They consistently maneuvered CLWR into a position where it could no longer alienate its spectrum w/o S baggage. Given these circumstances the "special spectrum committee" may indeed have exercised proper fiduciary duty in determining CLWR value given the entangling control situation with S -- but that is a sideshow.

     

    The operative issue is this: Given the well established high profile reputations of the principals here involved in the wireless business, it will be interesting to see how they explain why they managed CLWR and its invaluable spectrum resources into such a distressed position that it had no alternatives other than to sell to S.
    19 Dec 2012, 03:04 PM Reply Like
  • xhobbesx54
    , contributor
    Comment (1) | Send Message
     
    hello all. Can someone explain to me why CLWR shares are trading lower than $2.97 when there is already an offer from Sprint to buy all remaining shares at that price? I want to sell my position already and move to other opportunities. Thanks
    19 Dec 2012, 03:59 PM Reply Like
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