Google will sell stake in Clearwire for $47M, takes loss on investment

Google (NASDAQ:GOOG) filed with the Securities and Exchange Commission to sell its entire financial stake in Clearwire (NASDAQ:CLWR) for $47 million, a steep loss on the $500 million investment Google made in the company in 2008.

The search giant said it plans to sell around 29.4 million shares in Clearwire for $1.60 each; Clearwire's stock slipped 5 percent to $2.16 in morning trading following the news. Google will offer its shares to other Clearwire investors Monday before offering them to the general public five days later. "Google periodically rebalances its investments based on its goals and its evaluation of market conditions," Google said in its filing, without elaborating.

A Clearwire spokesman declined to comment, citing a policy of not commenting on shareholder actions.

The sell-off 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.

Clearwire intends to launch 5,000 TD-LTE cell sites by June 2013. However, the company said last week 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 SEC filing
- see this WSJ article (sub. req.)
- see this TechCrunch post

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