Google, which was an early investor in Clearwire, has just announced that it will now start trying to sell its stake in the mobile broadband network provider, incurring a loss of about $453 million.
Google is seeking to sell about 29.4m Class A shares for around $1.60 each, or a total of $47.1 million, representing a 91% discount from its original investment in Clearwire made in 2008. The online search firm said in its securities filing on Friday that it was willing to offer its 6.5% stake to some other Clearwire investors starting on Monday before offering those shares to the general public after 5 days.
In its filing, the firm said that Google aims to rebalance its investments periodically based on its aims and its evaluation of what the market conditions are like, without going into any other details. Representative from both Clearwire and Google have refused to comment on the situation. Shares of the Washington-based Clearwire Corp. dropped by about 5.1% on the back of this announcement and are currently valued at $2.15.
Last week, Clearwire warned that it might need to raise some more capital to fund some of its operations beyond the end of the year and also said that it could no longer offer any debt that had been secured by its various valuable network assets. It now plans to spend about $600 million towards constructing a new 4G mobile broadband network, which would be called Long-Term Evolution, over the next two years. A spokesperson for Sprint, which currently holds a 49% voting stake in the firm, has also declined to comment.
The various cable companies involved in Clearwire may also leave the company soon as they seem to be retreating from rolling out wireless services. The companies have also recently reached a new agreement with Verizon Wireless to sell Verizon a block of their spectrum for $3.9 billion and to resell Verizon’s services in their own stores.
In a regulation-based filing made by Clearwire this month, it said that it could lose as much as 5% growth in its broadband services, which has been branded as Clear, if Comcast and Time Warner Cable decided to discontinue their wireless services. While Comcast has not issued any comments till now, a spokesperson from Time Warner Cable said that the cable firm currently has no plans to sell its Clearwire shares.
January 26, 2013 at 2:23 pm
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