Is it possible Hesse is merely counting on the credit crunch continuing due to the fallout in Europe. Banks are being subjected to yet another stress test. I read an article in the WSJ about Bank of American that was so full of misleading information. "IS ANYONE INTERESTED IN FUNDAMENTALS ANYMORE?
Apparently not, for if one were to look at BAC's balance sheet they could see how misleading the information coming out of some newpapers and small analyst firms actually is.
Anyway, back to the topic at hand-
Yesterday another downgrade on CLWR is helping Mr. Hesse's plan and IMO his plan includes waiting out CLWR management until the very last second, look them in the eye and say "We are the only ones that can help you, so here is the deal".
The problem with that is that CLWR has already fired a warning shot over the bow. The next one will be a direct hit by either saying "Okay now get in line behind everyone else to get paid", or another player is in the wings.
This is such an unfair situation with regards to the shareholders. It's no wonder why folks are in such an uproar over corperate America and government.
JMHO and two cents...
I understand that CLWR owns 20 billion dollars worth of 'spectrum'. It seems logical to me, if they are short of money to sell 10 billion and have enough left over to come out smelling like a rose.
the situation is very sad and warrants a big effing lawsuit from shareholders against sprint and it's managers.
the best and most obvious way is to make good of sprints clwr investment, make value out of clwr and retrieve the 54 percent invested and pay off sprint debt.
but no, they rack on and add on never ending debt...MORE DEBT ON TOP OF MORE DEBT and then they suggest they want to trash the clwr investment...how friggin lame is this seriously
Well you have to question what Hesse was thinking???....Hiding behind anti-trust and being happy to be #3 was not a strategy that was going to work forever.
The idea that as CEO he was caught of guard at CTIA (and I thought he was going to cry in the CNBC interview) when AT@T made the T-Mobile deal actually scares me...It really showed me that he had no idea what was going on in telecom....I mean what happened was the next logical move in consolidation and had been hinted at for quite a while.
"Business is War"
Neither Sprint nor Clearwire are able to play a chess game in a room by themselves... they both are operating businesses that face difficult, rapidly changing competitive environment and access to capital.
Both sides are pushing their agendas to the edge of the cliff and both face undesirable consequences and unknowns ... and also part of this is making moves based on how it impacts the overall business objectives.
You are right: Sprint has an agreement with Clearwire to supply them with wholesale WiMAX service through at least next year. Clearwire's debt is not their direct responsibility. While it may appear 'unfair' for them not to pick up the tab for the Clearwire train wreck, Sprint does not have that direct responsibility. That over-simplifies the situation. "Of course they have a responsibility to keep Clearwire going because they are the majority owner and revenue."
Clearwire is also pushing to the last minute. Since they ran the comp[any finances in to the ground, why aren't they responsible for the outcome? "Yea but the economy sucks.. capital markets are tight and partners have shied away from locking up with a debt ridden enterprise without Sprint's longer term saving grace." OK, its a marriage... 'I take thee for the good and the bad'... perhaps 'until death do us part'. However, just like in marriages, most disputes stem out of financial difficulties. Both sides difficulties are very real... and thus the 'why won't you just agree to pay our bills.. don't you love us anymore?' falls on the deaf ears of a cash-strapped partner with other commitments.
"Brawhhh, Hesse is such a brute! He won't let me live like we want... so what if I like fine things (direct retail blunders), he should pay and not get his nose bent out of shape... I am still attractive and others will find me appealing.. if only Hesse funds me. Brawhhh!"
Clearwire has been the hand-madden more than the bride... doing too little innovation that would drive down costs. Instead relying on old school, brain-deadening product and marketing strategies long after they showed to be failing. Only now do they offer modems with ports and VoIP? Gee, something other WiMAX operators have used for over five years? And still no use of microcell or other innovations? Give me a break. This will be a nice MBA program case study... opportunities missed.
Clearwire must be failing to innovate on purpose.. it has been just too convenient that they delivered zero network or device innovations that would have upset the old school business models and positioned them as technology might otherwise have enabled.
However, none of that matters now. All that matters is where they are at and how they move forward. We all make mistakes or have goals that are complex (the mistresses in the background that steal our affections away.. from what is right for us. The occasionally clouded judgement). Clearwire does show improved direction and focus that can redeem their sorry state of business affairs.
What are the subtexts? Do we know why Clearwire does this or that and not the other? What strings manipulate this puppet? They must be there because this Pinocchio should have had better sense.
If Sprint provides funds are doing it without reaping anything? I don't think so. What I don't understand is why won't they? They ready to drop money and CLWR when they thought Lightsquares was going to lead them to the promise-land. Let's be clear, this is a joint venture not someone looking for a hand out. They got the money CLearwire paid for and has the spectrum...
That strategy leaves Sprint dependent on another company and the courts rather than on its own ability to compete. Hesse is saying he can't figure out how to compete using what Sprint has now... the fattest pipes and the most modern infrastructure out there that can be converted to the most advanced network (TD-LTE), at the cheapest price, with a workable unlimited plan. And oh-by-the-way, the next iPhone will support that network because it is going to be the world standard because of China.