Clearwire shares slide on TWC stock selloff
News that Time Warner Cable had begun selling off its shares of Clearwire sent the WiMAX operator's stock sliding yesterday, a downward drop that continued today.
Clearwire's shares dipped about 6 percent to as low as $1.35 in morning trading before bouncing back to $1.41.
Time Warner Cable said last week that it planned to shed its entire 7.8 percent stake in Clearwire. It gave Clearwire's other investors the option to buy the 46.4 million shares first, before they went up for grabs by the public.
Thursday's announcement that all of the 46.4 million shares would become available through a public offering indicated that none of Clearwire's other investors elected to purchase them, prompting the decline in Clearwire's stock price.
Sprint is currently Clearwire's largest investor. Other companies with stakes in Clearwire include Comcast, Bright House Networks and Eagle River Holdings.
Time Warner Cable will sell the shares at a significant loss. It paid $550 million for the stock in 2008. At Clearwire's $1.48 closing price yesterday, the stake is currently worth only about $68 million.