First of all, the ability of this company to sustain itself has nothing to do with net EPS losses... it has everything to do, however, with EBITDA.
The reason is because the ability of this company to thrive has everything to do with the sustainability, and deployment, of it's cash... and EBITDA removes non-cash expenses from it's earnings.
Put another way, depreciation expense is a non-cash item, because it represents the amortization (for lack of a better term) of cash that was spent years ago as cap-ex to build the company's network. That cash is already out the door.
So, with a $42 million negative EBITDA ($50 million when you include "wasted" expenses related to sprint's ridiculous, $2.97 bid) and another $50 million in cap-ex spent building CLWR's TD-LTE network... we're talking about 1/8 of the company's cash spent in Q1... and the money spent on TD-LTE is certainly money well spent.
Now let's consider what happens if Clearwire's executives, who have been bought off by sprint via a cashable stock option scheme, were to accept Verizon's offer to buy 1/10 of their spectrum for $1 to $1.5 billion. That would push clearwire's cash holdings to around $2 billion, pay for the TD-LTE build, and leave enough dough in the kitty to pay for the next 200 annual picnics over at dish network.
Is it any WONDER that Crest is taking the activist stance that it is...
... they are absolutely RIGHT about the need to reject sprint's ridiculous, $2.97 buyout bid.
Spok, I couldn't agree more, but it's easy to say we should reject the $2.97. What should we do if they raise the offer to $3.50? What about $4.50?
One of the most discouraging things I heard was that the 2000 LTE sites will be ready to connect to Sprint's core network. In other words, without Spirnts core, there is no Clearwire TD-LTE network. On the otherhand, Sprint has planned their whole future on using Clearwire's spectrum and 5000 TD-LTE sites. So they can't just refuse to let Clearwire connect to their core without shooting themselves in the foot.
sprint NEEDS clearwire Softbank NEEDS clearwire and ergen WANTS clearwire. this is far from over...clwr needs the votes and they will not get the votes with a 2.97 bid...Crest is leading the charge and I'm following along....Voting NO.
Clwr's BOD's knows full well Crest and others [including DISH and VERIZON] are circling the wagons..and they need to put on a front since they initially flew to a yes vote on Sprint's paltry 2.97 offer for the rest of this company. The first clue this would FAIL was McCaw's make whole agreement....and now Clwr needs to look like a victim in SB and Sprint's eyes and send out the public statements.....total eye wash.....I VOTED AGAINST the 2.97 offer...
Sprint bought the Clearwire brass. They end up with HUGE incentive payments if sprint's ridiculous offer goes through.
Clearwire's executives and board would tell shareholders to accept the sprint offer even if it was $1.97 a share because if sprint doesn't end up with clearwire, they lose out big time financially.
It is AMAZING how differently Clearwire portrays the company's prospects now VS how they were talking about them just 8 months ago.
It's AMAZING how a boat-load of payoff loot from sprint can change what they are saying.
To the extent that sprint secures the votes of shares that are held by clearwire brass, it actually constitutes a rock solid case of "vote buying".
They've clearly bought the vote of Intel and Comcast... essentially telling them that future business with them on the part of sprint is dependent on them voting for their ridiculous offer. There's a court suit outstanding to recuse their vote given that they are "control" shareholders....
.... we'll see if some liberal, Puget Sound judge has the gumption to call THAT spade a spade.