I recall a detailed article from seeking alpha breaking down what shareholders might expect in the event of a total liquidation. I believe it said around $9.50 a share after all the bondholders are paid. It may have been an opiinion but it sure seemed as if the author knew what he was talking about.
Sentiment: Strong Buy
I hate to burst your bubble of hopes but apparently Clearwire’s spectrum is worth less than what shareholders are perceiving.
“Over the past several weeks, we have received what we would categorize as a credible but also preliminary proposal to acquire a portion of our excess spectrum. We worked hard to improve that proposal and we will be able to say more about that in our upcoming proxy disclosure. But suffice it to say that the value attributed to our spectrum was also well below recent speculation. Our special committee and board, with the assistance of their respective financial advisers, concluded the Sprint transaction was a better alternative for our non-Sprint Class A stockholders.
We have also recently reached out again to all parties we have previously been in discussion with, with no new interest generated. Even if we were able to sell a meaningful block of spectrum, it does not address the fundamental issues that our company is facing, which is our inability to get a second major wholesale customer.
I would also note that selling spectrum may create new issues that the company does not face today. First, it may create a new competitor. Second, we may see our spectrum further traded to someone else, including Sprint, which would not be good for us.”
In terms of getting a partnership with Dish or others that’s also a non-starter due to Clearwire’s agreement with Sprint.
“Despite our efforts, we have been unable to secure new partnerships. Our existing governance agreements prevented us from offering third parties the governance rights they desired in a partnership.”
STOP Dreaming and Face Reality!
There is nothing left above 2.97 than dreams for what once was.
A factor in the value is that the deal to create New Clearwire and spectrum accumulated by the joining of the old Clearwire and Sprint as set up to have restrictions guaranteed to Sprint in the covenants. Even without them, the anyone who looked to partner with Clearwire knew that Sprint was the big brother that controlled most of CW's business fate. That is what investors bought, not a dream of their onw making.
Companies go to the public markets to give them additional capital and liquidity.. the ability to sell risk to chumps who are prone to ignore the SEC documents and basic framework of the business model to imagine that their little company has unbounded degrees of freedom to do what they wish. There are so many faults with the initial thinking of most investors coming to a ricky tech stock like Clearwire that it almost becomes a license to take advantage of them.. too easy of money.. the easiest on the planet of such a size and continuity. Where else can industry turn promising technology into such madness, er willingness to buy into dreams? .. and anyone who interjects words of cuation or the 'yes. but' inflection into the debate is summarily shot down or, in the current iteration of this board, gets 'disliked' by the school girlish crowd.
The king is dead, long live the king! (Brain-dead is dead, 4G/ICT hardly notices) Onward and upward toward True 4G.. Go Softbank-Sprint!
Good luck all on the quest to recover some equity.
I think shareholders still would receive considerably more in total liquidation, where the spectrum rights were auctioned off in 20 mhz chunks. But Sprint won't allow that by always giving Clearwire just enough to survive. And it appears they've somehow pressured management not to rebel and default on a payment. It was telling that the threat if the deal is blocked, is restructuring not liquidation.
Sprint/Softbank is taking over Clearwire regardless of the vote and lawsuits. They might offer more to get the deal done fast and clean, or they may just take it the hard way in a year after the standstill agreement expires. I think shareholders can get at least a little more by voting against the deal because Sprint/Softbank doesn't want to mess around for another year.
Disclaimer: I've sold out my entire position in CLWR and I'm majorly #$%$ about the offer
but I've read the 8K for the acquisition and I think the board did due diligence, they've looked into all possibilities multiple times: partnerships, partial spectrum sales, refinancing their debt, etc, etc
But as they stated in the 8K their biggest problem was not finding a 2nd major wholesale customer to go with Sprint. And with all the consolidation going on and ATT and Verizon finding spectrum through acquisitions, the 2nd major wholesale customer will never happen.
Without it they will never be able to generate enough revenues to be a stand alone company. Freedompop, netzero, karma, etc are still small fish
we're not exactly in boom times either. MetroPCS was acquired with very little premium, Sprint was acquired with very little premium, why should CLWR be any different?
McCaw and Stanton who created the wireless industry in the US and were insiders, sold out at $2.97. I've decided to do the same and move on (and I truly believed we would get $5)
good luck with a class action suit, but I think my money and energy are better off spent somewhere else
That was then, this is now. I had a higher price for valuation of Clearwire months ago. However, that was based on the expectation they their agreement with Sprint allowed them to hang around long enough to see the first phase of the ramp of LTE. I had also suspected that WiMAX sales would drop, this Qtr. is not reported yet, and that the recent delay in deployments might impact their position. Then Softbank offered to acquire Sprint and S purchased and was given the green light by the FCC for the increased spectrum. That has shaken up the relationship putting more control into Sprints hands and placing Clearwire in an even more dependent position. They were already over a barrel.
The 'value' is lower because CW has no other choices. That seems unfair but is a risk of business. In the end, Clearwire's business failed, simple as that.