Craig McCaw was HAPPY to sell his shares in order to ensure that softbank can fund "what comes next".
Softbank's creditors needed more than 50% ownership of CLWR by sprint in order to proceed. Craig McCaw needed assurances that the "end game" next summer would be a buyout of clearwire for significantly more than Sprint was paying him for his shares.
The result was McCaw's "make whole" clause... and, IMO, an assurance from Hesse that softbank's goal was total ownership of clearwire, once the sprint deal was fully consumated and sprint had more than enough proceeds from the buyout to fund both Network Vision AND the clearwire acquisition.
What is SO WIERD is that McCaw's "make whole" deal is shouting from the ROOFTOPS that Mr. McCaw has been assured of a "payday" down the road once softbank has secured it's ownership of Sprint...
... but looking at the clearwire stock price, it seems that everybody else who invests in clearwire can hear all that shouting from the rooftops!
Intel and Comcast could see the writing on the wall. Hesse approached them before he did his deal with McCaw... and they told him they'd sit tight with their stock and wait for the payday, thank you very much.
That this stock is trading less than $3 is baffling! Does the average clearwire investor REALLY BELIEVE Hesse when he blows smoke and lowers expectations for clearwire stock?... he's been doing that for YEARS, people, and everybody but Softbank's Mr. Son just keeps LISTENING to that #$%$.-er blow his smoke.
My advice... turn OFF the daily blarings from Dan Hesse and rub some of that Craig McCaw, "make whole" clause all over your face... all over your BODY...
... then go out there and ACT on what's staring you right in the face!
Can’t quite agree with your view there. The “make whole” provision was added later in addition to Class B inflated pricing to entice McCaw to sell his stake like “right now” and it looks like they have succeeded. Comcast was most likely offered the same $2/share deal for their Class A shares but Comcast dissed it. The “make whole” provision is not a guarantee or a contract that states Sprint will definitely acquire Clearwire at later date for that may never happen. Why would the “make whole” provision set until 2015 when there's already an understanding with McCaw that Sprint intends to acquire CLWR by the summer of 2013 as you have claimed?
... and since holding more than 50.4% of clearwire adds no further control of the board of directors short of tendering for all of clearwire...
... then why is Hesse saying that sprint will continue to buy any shares that major holders will sell to them for an attractive price?
The reason is this: Sprint doesn't have much capital to spare on clearwire between now and next summer when they receive their $8 billion merger payday. They need as MUCH of their current cash as possible to execute on Network Vision because Verizon and AT&T are way ahead of them with LTE. If they (and softbank) were content with the status-quo, then sprint wouldn't be any more inclined to buy CLWR shares NOW than they were BEFORE the softbank deal arose... but that's not the case.
The softbank deal required 50% ownership to satisfy softbank's financiers... but additional shares that sprint might purchase with their precious N.V. cash would effectivey move sprint "toward" something that's consistent with softbank's obsession... which is clearwire's massive spectrum... and total control of it.
If a buyout wasn't in the cards later next year, then Hesse wouldn't be willing to pick up more shares now... and McCaw wouldn't have been so satisfied with how well his make-whole clause mitigates the low price he sold his shares for.
Hesse can say what he want's... but actions speak louder than words and the smelly-scented trail that leads to a buyout doesn't require a bloodhound to track.
CLWR is a zombie. S controls w/o having to buy one more share. $5/share of spectrum gets "acquired" for $2 to $3 per share to McCaw and you guys keep thinking Hesse and McCaw are somehow going to make you rich. McCaw is not now, and never has been, a benefactor of mankind. I hope the day traders have a lot of fun for the next few months. This is a play-money-only stock. Rock and roll. If you're still a holder at the IPO you've got a serious clinical issue.
Sentiment: Strong Sell
Huh? Who is smarter, Craig McCaw or public investors who ride stocks from high to low without protection strapped on like McCaw? All that says is that McCaw went into the deal with a different set of circumstances. He/Eagle River was not nearly so foolish to invest at the IPO price or any price without 'make whole' clause. Debtors may well have implemented their own form of hedge-fund 'make whole clause-in-effect' by shorting the stock by the tens of millions of shares. That is beautiful. One day I hope to learn more of the details of who shorted what. Seriously, 50-70 million shares short almost from day one of the IPO should at least be cause for an interesting study of the methods and to see if its repeatable. I am very interested in understanding all aspects not just a bull diatribe perspective of how the stock has worked out.
I am a pain in the #$%$... and I know it .. however, that might be better than betting on CLWR based on the bullish perspective only.
For a guy who professes not to be overly interested in Clearwire, it's strange the first thing he moved on WAS Clearwire after the SB agreement. Apparently nothing better to do but get rid of $100M quickly and McCaw happened to be the guy standing next to Hesse when the urge hit…what a coincidences!
... because sprint has enough cash to finance a good deal between now and next summer when they get the $8 billion and buy out the rest of clearwire...
... but Sprint WON'T pay much for it now because they need their cash for Network Vision and progress on Network Vision and Clearwire's 5,000 sites is ESSENTIAL to keeping up with Verizon and AT&T.
Until next summer, Hesse will say ANYTHING he can to lower CLWR expectations and keep the stock as cheap as possible until he gets the softbank cash and launches the tender offer for 100% of clearwire stock...
... just as Softbank's Mr. Son and Craig McCaw, with his "make whole" clause... expect him to do.
Geez... it couldn't BE more obvious. ANYBODY could see that Softbank's Mr. Son is OBSESSED with clearwire's spectrum. If it wouldn't complicate the DOJ's evaluation of the sprint acquisition, then SOFTBANK ITSELF would probably tender clearwire's shares as we speak.
Has he said that? Where has Hesse said that Sprint-SB will not use Clearwire or that it isn't vital? The problem is perspective: to mobile operators the most vital thing are what is happening with subscriber revenue and retention/growth. Spectrum is property - in the case of 2.6GHz spectrum it is largely undeveloped property that takes billion$ in capital to turn into net subscriber gains and revenue.
"I have 20,000 acres of prime land in Utah to sell you.. its as good as any property in the LA basin or Boston area. I'll sell it to you for only $250,000 per acre.. better buy quick because demand will be brisk". is the jest of what many seem to argue about 2.6GHz spectrum... its vast and unused so its wonderful.. put on the rose colored glasses and take LSD and all is the same wild trip.
Sprint has consistently said that 2.6GHz is part of their future but they must exploit it so that it doesn't flush the already struggling company down the shitster.
Clearlywired is too expensive. The network service sucks as a value proposition considering the evolution of competitors networks.
Sprint wants and could easily be argued to 'desperately need' access to 2.6GHz spectrum but only if the networks are executed efficiently. Clearwire has failed to do so. That is not 'just my opinion' its a fact evident in the financials and quarterly reports.
The conversation needs to be "we know Clearwire performance sucks the big one... now where do we go from here." Not this diatribe #$%$ about Hesse. Forget Hesse. All that matters is delivery of networks that have value.
SB-Sprint will wrench that value out of 2.6GHz with or without Clearwire. Is Clearwire going to shape up as a great new brand of 'WBBB utility', the 'Switzerland of WBB'? The spectrum will because if Clearlywired doesn't deliver then they get taken out one way or the other. If they do not deliver value, then they lijkely get taken out with stock holders unable to cut juicy up-front deals similar to McCawe holding the short end of the stick. That is the freaken way it is folks.
IMO, it's simply a case of capitulation. The blatant manipulation of the stock price, combined with the SB/Sprint deal that appears to have screwed CLWR and its investors has left the average investor running for the exit.
I don't blame people one bit for giving up on this stock. I've never owned a stock that gave me such a headache. I sold all my shares (over 200k) over the last two weeks. All I have left is a few hundred contracts that expire over the next two months.
At this point, I couldn't care less if CLWR got $8/share. Once my options expire, I'm selling my shares and never looking back. My loss, I'm sure. But I'll sleep better at night knowing that I don't own this pos stock.
And I don't trust Sprint, SB, Hesse, or McCaw one single bit. They are not looking out for the best interests of the shareholders, IMO.