NEW YORK, Aug 10 (Reuters) – Shares of wireless service
provider Clearwire Corp fell 3 percent on Friday after
Macquarie Capital recommended investors sell the stock on
concerns about funding.
Clearwire shares were down 6 cents at $1.56 on Nasdaq after
Macquarie analyst Kevin Smithen downgraded the stock to
underperform citing “significant liquidity risk” and worries
that options for new funding were limited.
Smithen downgraded the stock to “underperform” the morning
after Clearwire’s biggest shareholder Sprint Nextel priced
a $1.5 billion debt offering and said potential uses for the
proceeds could include funding for Clearwire.
But Smithen still said that he thinks Clearwire, which has
said it has enough funding for 12 months, would be “unlikely” to
get new funding or to find a buyer for spectrum it is not using.
And absent either of these events “the shares are likely to
drift lower” the analyst said in a research report.
Investors had pushed up Clearwire shares 18 percent on
speculation that Dish Network Corp had bought roughly
$400 million of Clearwire debt.
Smithen said that he believes Dish has bought Clearwire debt
but added that the recent share price increase only made the
timing better for the sale of Clearwire shares.
“A debt position yielding (15 percent plus) isn’t a bullish
call on Clearwire equity” and “doesn’t solve Clearwire’s
$1.5.-$2bln funding shortfall,” Smithen said.
