The bulls came out of the woodwork on tech ticker. Predictors are all over the place. I made a little today on CLWR and sold at the close. A very interesting scenario is shaping up here. In the last couple of days T-Mobile has made overtures to Sprint. They want to buy into Clearwire, which Sprint owns 56% controlling interest in. Clearwire owns an abundance of coveted cellphone bandwidth T-Mobile USA badly needs if they are to move into the mobile broadband arena. Sprint needs it too. Theorists are speculating a buyout is imminent, but a buyout of whom? Rumor has it they may try to buy Sprint. Sprint would never sell Clearwire but Sprint needs the cash to complete its own buildout. Oddly, Clearwire, although only holding a minority interest (less than 40%) in itself, controls 7 of 13 members on the BOD and has the power to do its own deal.
Sprint, selling for 4.30/share plus or minus, book value 5.50, market cap 12 billion, enterprise value 27 billion.
T-Mobile USA, a subsidiary of Duesche-Telecom, rumored to be the largest phone company in the world, and DT is a German company, so no current figures are available, but look at what's been happening to their net worth:
A company that was worth two Exxon Mobils a couple of years ago may be nearing BK. This is the price they've paid for ignoring the technology gap. The way I see it T-Mobile has no choice. They must do a deal and do it very soon. They need the spectrum to get into fourth generation mobile broadband, or else get left behind. There is no other spectrum remaining.
So, which stock to own going into the weekend? S or CLWR? Both probably.