Clearwire stock deflates on Kaufman revenue outlook

Clearwire ended 2011 on an upbeat note, at least financially-speaking, with its stock price jumping after AT&T killed its deal with T-Mobile USA. That broken deal highlighted the value of other companies with vast spectrum holdings, Clearwire among them. The operator of WiMAX (and eventually TD-LTE) networks also was celebrating and IPO, as well as a fresh investment from Sprint and a new LTE wholesale agreement with its majority owner.

However, just a few days into the new year, the stock market is not smiling on Clearwire, as its share price headed below its $2 IPO price today after a Kaufman Bros. analyst cited a "flattish" revenue expectation for Clearwire and a target share value of $2.

Kaufman Bros. analyst Ben Abramovitz said in a research note that revenue for Clearwire from the Sprint wholesale agreement is supposed to be $600 million in 2012 and $300 million in 2013, but that the companies may instead report $450 million in revenue for each of those years. Expected Clearwire wholesale revenue of about $457 million in 2012 means "top-line growth in the low-single digits for 2012, which is likely to limit results and appreciation in the stock price," Kaufman explains.

Also affecting Clearwire is the move by cable TV companies to partner with Verizon Wireless, and the likelihood it will need debt financing to support its LTE build-out strategy.

For more:
-see this Forbes story

Related articles:
Spectrum holdings made Clearwire's stock desirable just days ago
Clearwire increased the size of its public offering last month

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