Google lost $433.5M on Clearwire investment, less than expected

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Google (NASDAQ:GOOG) revealed that it lost hundreds of millions of dollars on its investment in Clearwire (NASDAQ:CLWR)--but its losses were slightly less than originally expected. 

In a recent filing with the Securities and Exchange Commission, Google said it sold its stake in Clearwire--29.4 million shares in all--for $2.26 each, or $66.5 million. That represents a $433.5 million loss on Google's $500 million investment in Clearwire from 2008, but it's slightly less than the $453 million loss initially expected. Google said in a separate filing last month it would sell its shares in Clearwire for $1.60 each, or $47 million. As it stands, Cleawire's shares were selling at $2.15 per share in late-morning trading Wednesday.

According to Dow Jones Newswires, Clearwire said it was not involved in the sale and declined to comment, as did Google. "Google periodically rebalances its investments based on its goals and its evaluation of market conditions," Google said in its filing last month, without elaborating.

The action by Google is another indication that many of the companies that contributed a total of $3.2 billion in strategic investments in the formation of Clearwire are now turning away from the company. Intel remains an investor but sold 10 million shares in 2011. Comcast, Time Warner Cable and Bright House Networks announced cross-marketing deals with Verizon Wireless (NYSE:VZ) as part of their sale of AWS spectrum to Verizon. As a result, Comcast and Time Warner will stop reselling Clearwire's mobile WiMAX service.

Sprint Nextel (NYSE:S) remains Clearwire's largest investor and wholesale customer, and still has a 54 percent economic stake in the company. Sprint also contributed $331.4 million in fresh equity to Clearwire in recent in months as part of a round of funding in which Clearwire raised $1.1 billion. However, Clearwire said last month that despite the fresh funds, which will carry it through the end of 2012, it may have to raise substantial amounts of cash after that. "We do not expect our operations to generate cumulative positive cash flows during the next 12 months," the company said in a recent SEC filing. "We may need to raise substantial additional capital to fund our business."

For more:
- see this Dow Jones Newswires article (sub. req.)

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