Shares of Clearwire Corporation(NASDAQ:CLWR) fell as much as 17.10 percent on Tuesday trades on speculation that Sprint Nextel Corporation(NYSE:S) would not be bidding to raise its stake in the company any time soon. Before today, shares of CLWR had gained 100% in the past one week.
On Monday, Japan's No. 3 network carrier made a deal with Sprint to buy a 70 percent controlling stake in the U.S. carrier for $20.1 billion.
Bloomberg said that the deal between Softbank and Sprint would take about six to eight weeks to close and during that time both companies are restricted from engaging in any activity involving mergers and acquisitions.
Clearwire's shares had risen as much as 16 percent on Monday, when the deal was announced on hopes that the Softbank would help in Sprint taking a controlling stake in it.
However under the terms of the deal it looks like this will not be happening, at least not within this year.
“Sprint doesn’t need to own Clearwire now, as they already paid $900 million to lease the spectrum they need for 2012 and 2013,” Robert Chapman, founder of hedge fund Chapman Capital LLC told Bloomberg.
“Sprint may be better off buying 700 megahertz spectrum.”
Softbank chief Masayoshi Son had declined to answer a question about Clearwire when queried by an analyst. "“I don’t talk about any specific detail of our strategy. I never do that in advance,” he said.