Intel said it plans to sell up to 10 million Clearwire (NASDAQ:CLWR) shares it owns in an effort to "rebalance its portfolio" and reap tax benefits. The decision, which will reduce Intel's stake in Clearwire by about 10 percent, sent Clearwire's stock down 12 percent in morning trading.
The chipmaker, which held around 10 percent of the equity in Clearwire at the end of 2010, said in a filing with the Securities and Exchange Commission that it will sell the shares to the public via its Intel Capital arm starting on or around Friday. Importantly, Intel said in the filing that "WiMAX continues to be strategically important to Intel, and the sale of the Class A Common Stock does not affect any contractual obligations or business arrangements between Intel and Clearwire."
In 2010, Clearwire and Intel amended an agreement the two have on WiMAX. The previous agreement had locked Clearwire into using WiMAX until the end of 2011 or early 2012, but the two parties decided to allow the deal to be terminated with 30 days notice. Clearwire last year began testing LTE technology, but has made no decision on whether to swap out WiMAX with LTE.
In January 2009, Intel booked a $950 million non-cash charge on its investment in Clearwire.
Clearwire said last week it no longer plans to sell any of its spectrum to raise additional funds for the company--at least not in 2011. Clearwire interim CEO John Stanton said that Clearwire's new wholesale pricing deal with Sprint Nextel (NYSE:S), which was announced last month, will bring $1 billion in cash to the company over the next two years, thus providing Clearwire with sufficient cash to fund operations for the next 12 months.
- see this Reuters article
- see this Bloomberg article
- see this AllThingsD article
- see this Barron's blog post
Clearwire discontinues spectrum sale - at least for now
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Sprint's Hesse: All 4G options include Clearwire
Clearwire: No LTE switch until 2012 at the earliest