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October 5, 2007

Clearwire's stock sinks on several issues

Posted by Tricia Duryee at 1:32 PM

Clearwire's stock fell $3.23, or nearly 14 percent today, to $20.38, representing the largest drop since the company went public. The decline came after a series of events spooked investors, according to Bloomberg.

Here's some of the factors:

-- Bear Stearns cut its rating on the Kirkland company's stock to "peer perform" from "outperform."

-- Bear Stearns said there may be delays in signing a final agreement with Sprint Nextel to co-build a nationwide WiMax network.

-- Bear Stearns said a delay could mean Clearwire needs to borrow more money.

-- Sprint Nextel is quietly seeking a replacement for CEO Gary Forsee, according to the Wall Street Journal, citing "people familiar with the matter."

-- A major rainstorm with possible winds brewing could knock down its network in Seattle.

OK, I'm kidding about that last one, but a number of things obviously could affect Clearwire's short-term performance.

Following the slide, Sid Parakh, an analyst with McAdams Wright Ragen in Seattle, reaffirmed its $28 price target.

He said concerns about Sprint's turmoil are valid, but in a nutshell, Clearwire is still on track as a standalone company. It is on target to build out networks in its territories on time, and it has sufficient funds to do so at least until sometime in 2008, he said.

"In addition, CLWR has powerful partners in Intel and Motorola that, we speculate, may be open to the idea of added investments in Clearwire," Parakh wrote.

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Tricia Duryee
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