Clearwire stock spikes on Sprint buyout rumors
Clearwire's shares climbed as much as 37 percent today in morning Nasdaq trading as jittery investors sent stocks soaring on rumors that Sprint may buy out its remaining stake in the troubled WiMAX operator.
The upward swing in the company's share price came after Bloomberg reported that Sprint is trying to convince cable companies to sign on to a deal that could eventually acquire Clearwire.
Sprint is reportedly trying to find ways to round up investment dollars for Clearwire so the operator can expand its WiMAX network, which it resells on a wholesale basis to Sprint and other companies.
Clearwire was forced last year to stall the growth of its network after it ran out of cash and says it needs $600 million to fund a new plan to overlay its network with a high-speed LTE service.
Investors reacted positively to the news, despite statements from anonymous sources that the talks were "preliminary and no deal is imminent."
Sprint currently holds 49.7 percent of Clearwire's common stock and is the company's largest shareholder. Cable companies have shown interest in Clearwire before. Three cable operators, Comcast, Time Warner Cable and Bright House Networks, were among Clearwire's early investors.
Today's rise marked a sharp reversal in the company's stock. Clearwire's shares have sunk from a high of $8.82 last September to a low of $1.32 earlier this month on concerns about the company's troubled relationship with Sprint and its ongoing difficulty securing funding to expand its WiMAX network.
The company's stock sold for about $3 in Friday morning trading.
Telecom stocks have swung wildly in recent weeks on high market volatility related to fears of another global recession. Leap Wireless International and MetroPCS both took massive hits to their share price after they reported earnings earlier this month.