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Clearwire Corporation (CLWRD) Message Board

  • bjspokanimal bjspokanimal Jun 21, 2013 1:15 PM Flag

    The Stock Is Trading on Ergen's Tuesday Comment

    On tuesday, Ergen stated that he was dropping his bid for sprint in order to "focus on" his bid for clearwire. Without that comment, I don't think we'd have the 10 cent premium over sprint's bid right now.

    For those who havn't noticed, the volume is huge.

    Anybody who's looking for a statement from Crest can probably save the effort. Now that Mt. Kellett and the gang of 4 have seen a price that they're willing to vote "yes" on, a "no" recommendation from Crest bears little weight.

    For those thinking that that puts Kellett & co. in the same boat as Intel and co... no. The Intel group is committed to selling to sprint regardless of the final bid, whereas the Kellett group is likely only committed to sprint if their bid remains the highest. Just like the recommendation of Clearwire's board, their commitment is only as solid as the efficacy of the latest bid for clearwire.

    Based on the rhetoric and actions, I still see about a 55 to 60% chance of an Ergen overbid. I don't see nearly as many affinities in a dish/T-Mobile tie-up, "for the price", as I see in a Clearwire/Dish deal. T-Mobile has precious little spectrum for LTE as it is, and Charlie's high-definition, video distribution aspirations don't match up well with T-Mob's capabilities. I've viewed both Ergen's and Masayoshi Son's references to T-Mobile as nothing more than a "decoy" throughout this whole affair.

    IMO, sprint's lawsuit was weak. As I mentioned in another post, I saw it as 1/2 delaying tactic and 1/2 an effort to lower expectations as to clearwire's true value. Nothing I've seen from dish deviates from the notion that they had pretty much fully analyzed the governance issues before they put up their first bid for Clearwire, given it's importance. For their part, Sprint waited barely 70 hours between their lawsuit threat and their "sizable" overbid... so much for THEIR confidence in the lawsuit's merits.

    Tally ho, and congrat's, longs. Patience has paid off, as it usually does.

    Spok

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    • Ergen had to know S may counter when he made his initial 4.40 offer... So he might already have a plan C in place and his finger on he trigger...

      • 3 Replies to mr_whigglee
      • Well, mr_whigglee, you saw how fast he filled to get his $2B back...

      • The bid sizes generally say a lot, and they appear to with clearwire as well.

        When sprint first trumped dish's $3.30 bid by only a dime, I believe their thinking was that Dish wasn't a serious bidder. That thinking was thoroughly bull-dozed by Dish's subsequent $1 over-bid... especially since it was thrown right in Sprint's face during their due-diligence meeting and with no warning.

        Knowing that they needed both a firmer response to dish, AND the support of the Mt. Kellett group, Sprint made a more substantial $5 over-bid, but true to Mr. Son's "skinflint" reputation, it wasn't the bold, $1 overbid stroke that could have convinced Ergen to get lost.

        Above $5 is where Sprint didn't want to ever end up... and above $5 is also where Ergen has to evaluate just how strong of a hand a minority stake really gives him. That's why I still see a 40% chance that the bidding could end right here. Clearwire is still good value, but it's no longer a full-blown Steal... and it's value is greater in the hands of the majority owner.

        Still, Ergen doesn't have a better option than clearwire at $5.20 or $5.30 a share. T-Mobile would cost much more for assets that are significantly less useful on a "per-dollar" basis. But... ergen can't bid $5.20 or $5.30 because THAT would show weakness on his part by showing "less resolve". He needs an overbid of at least $5.50 to exhibit credibility that he indeed, is "all in" in terms of commitment and, thus, have any chance of getting Sprint to back down.

        Spok

      • he definitely knew that. He is not just bidding to screw around. Unless there is a dish sprint deal, this game is still on. And even if there is a deal, the game may still be on.