Clearwire's funding issues spook investors, pushing shares below $1

Clearwire's (NASDAQ:CLWR) stock is now trading below $1 per share as investors raise concerns about the company's funding prospects, which will likely be in focus when the company reports its second-quarter earnings after the market closes tomorrow.

Clearwire's stock closed at 92 cents per share yesterday and this morning it was trading even lower, at 87 cents per share. The stock has lost 55 percent of its value in the past 12 months as the company's losses have continued.

Many investors had thought Clearwire would sell some of its spectrum, but that does not appear likely to happen any time soon as the company readies its TDD-LTE network launch for next year. "The stock is down because they have a funding gap, and the way most investors thought they would fill that funding gap was by selling spectrum," Thomas Seitz, an analyst at Jefferies & Co., told Bloomberg.

Clearwire had $1.4 billion in cash and short-term investments as of March 31, but has said it will likely need to get substantially more funding after the end of 2012. Clearwire intends to launch 5,000 TD-LTE cell sites by June 2013, but much of its future right now is bound up with that of Sprint Nextel (NYSE:S), its largest wholesale customer. Sprint intends to offload traffic from its FDD-LTE network onto Clearwire's planned TDD-LTE network.

Clearwire CEO Erik Prusch said in May the carrier will announce its TD-LTE equipment suppliers sometime in the second half of this year, likely in the third quarter. Clearwire has also said it would engage in vendor financing in order to fund its LTE buildout. Prusch said Clearwire likely would announce its vendor financing details when it announces its LTE equipment suppliers.

Under the terms of a deal Sprint and Clearwire inked in December 2011, Sprint will pay Clearwire up to $350 million in a series of prepayments over a period of up to two years for LTE capacity if Clearwire achieves certain buildout targets and network specifications by June 2013. Sprint and Clearwire said the agreements also establish long-term usage-based pricing for LTE services for 2012 and beyond.

For more:
- see this Bloomberg article

Related Articles:
Sprint: Clearwire's LTE will 'pinpoint' high-traffic areas
Clearwire signs TD-LTE roaming pact with China Mobile
Clearwire to announce LTE vendors in Q3 timeframe
Clearwire: Our LTE Advanced network will be able to hit 168 Mbps
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