Monday, October 15, 2012

Early Hour Movers: Clearwire Corporation (NASDAQ:CLWR) & Texas Instruments (NASDAQ:TXN)

TI mobile chip business acquisition, Amazon in talks: Reports
A Israeli financial newspaper has reported that Amazon.com, Inc.(NASDAQ:AMZN) is in talks with the company which supplies chips for its Kindle tablet and that the discussions have reached an advanced stage. The possible deal with the smartphone chip-making arm of Texas Instruments.

Incorporated(NASDAQ:TXN) could be worth billions of dollars and would place Amazon in direct competition with smartphone makers, California based Apple and South Korea based Samsung Electronics, companies that design chips for their own products.

"It would make sense, as the chip is a critical component and Amazon has an existing relationship with TI," said Nick Dillon, an analyst at Ovum. "With the trend towards more vertical integration, led by Apple, speculation that Amazon is interested in TI's chipset arm is unsurprising," said Ben Wood, head of research at CCS Insight.

However, not all analysts are convinced of the wisdom of such a move. Many feel that several independent smartphone chip makers are running heavy losses and Amazon should not be spending billions on acquiring such a business.

Amazon shares were trading higher at $241.90, down 0.14%. Texas Instruments on the other hand, was trading at $28.10, up 3 percent.

Softbank - Sprint deal drive Clearwire shares up

News that Softbank Corp, the Japanese mobile phone company, is going to buy a majority stake in Sprint Nextel Corporation(NYSE:S) sent Clearwire Corporation(NASDAQ:CLWR) shares flying in pre-market trade Monday. Sprint owns about half of Clearwire. Softbank plans to take a 70 percent stake in Sprint for $20.1 billion.

Clearwire runs a wireless broadband network that Sprint sells as Sprint 4G. Clearwire finds it difficult to operate on a standalone basis and needs funds for network upgrades.

However, the deal with Softbank does not require Sprint to take any action pertaining to Clearwire.
Clearwire shares rose 14 percent to $2.65, up 33 cents in the morning session, extending its one week gain to over 115%.

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