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.
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