Time Warner Cable said it will sell its entire 7.8 percent stake in Clearwire (NASDAQ:CLWR), another sign that the WiMAX provider is losing former allies as it moves toward its LTE launch next year.
In a filing with the Securities and Exchange Commission, TWC said it will sell its 46.4 million shares. Though TWC holds a 7.8 percent economic interest in Clearwire it only holds 3 percent of the voting shares in the company.
The decision to shed the shares comes after TWC, Comcast and Bright House Networks finished their sale of AWS spectrum to Verizon Wireless (NYSE:VZ). Under the terms of the companies' deals, the cable companies can become MVNOs of Verizon's service. Comcast and TWC stopped reselling Clearwire's mobile WiMAX service earlier this year.
"It seems like an opportune time to start to sell the shares in light of the company's arrangements with Verizon Wireless," Time Warner spokesman Justin Venech told Bloomberg. Clearwire declined to comment.
Time Warner invested $550 million in Clearwire in 2008, part of a round of $3.2 billion in strategic investments. Today TWC's shares are worth less than $75 million. Yet it is not the only Clearwire investor to have sold its stake. Google (NASDAQ:GOOG) sold its stake earlier this year and lost the vast majority of its $500 million investment. Comcast still owns its 88.5 million shares in Clearwire.
Clearwire has defended its financial position despite concerns about its long-term funding. The company said it had $1.21 billion in cash, cash equivalents and investments on hand at the end of the second quarter, down from $1.4 billion at the end of the first quarter. Clearwire CFO Hope Cochran has said the company has enough cash on hand to last for the next 12 months, and that it expects to receive LTE payments next year from Sprint Nextel (NYSE:S), which is Clearwire's largest wholesale customer and shareholder. However, Cochran said the company is still open to "strategic transactions" or asset sales--likely spectrum--to increase its cash position.
Interestingly, Dish Network disclosed in an August SEC filing that it had made a $396 million strategic investment in debt securities of an unnamed "single issuer," which Dish said "has indicated that it will need substantial additional capital to meet its business and financial obligations beyond the next 12 months." There has been speculation that the investment was in Clearwire. Neither Dish nor Clearwire commented on that speculation.
For more:
- see this SEC filing
- see this WSJ article (sub. req.)
- see this Bloomberg article
- see this Reuters article
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