Clearwire shares jump on reports of Sprint talks
Clearwire shares jump on reports that Sprint Nextel is in talks to buy out wireless operator
NEW YORK (AP) -- Shares of Clearwire Corp., which operates a wireless broadband network, climbed Tuesday on a report that Sprint Nextel Corp. was in talks to buy out other owners.
THE SPARK: CNBC and The Wall Street Journal reported, citing unnamed sources, that Sprint was in talks to buy the 49 percent of Clearwire that it doesn't own. The companies said they had no comment on the reports.
THE ANALYSIS: It's widely assumed that Sprint will buy Clearwire to get complete control of it, especially since Sprint is set to get an infusion of capital by selling 70 percent of itself to Softbank Corp. of Japan. But the timing of the Clearwire buyout is a matter of speculation.
Sprint uses Clearwire's network to provide "Sprint 4G," but it's building its own 4G network at the same time, and would like to see Clearwire upgrade its network to use a compatible technology. Clearwire is strapped financially, and lacks the funds for a comprehensive upgrade.
Clearwire's market capitalization is $4 billion.
SHARE ACTION: Clearwire shares rose 32 cents, or 13.3 percent, to $2.72 in afternoon trading. That's the highest level since Oct. 15, when the Sprint-Softbank deal was announced.
