On Tuesday, Sprint Nextel (NYSE:
) revealed that it is no longer the majority shareholder of
), as Sprint now owns less than 50% of the company. Despite this,
Sprint remains the largest shareholder.
Sprint and Clearwire have been working together to develop a
4G network. Both companies have stated that their working
relationship will not change as a result of the news.
As of Tuesday morning, Sprint was unable to confirm the exact
amount of the current stake, due to the fact that the Clearwire
equity offering is ongoing. Sprint's holding is understood to be
less than the 51% stake required for a majority. In fact, Sprint
declined to buy CLWR stakes in the last round, although it will
look at its options again as opportunities arise.
Clearwire has been struggling for some time now, and Sprint
has been trying to distance itself. This time last year, Sprint
reduced its voting stake in CLWR so that Clearwire could not
adversely affect Sprint's debt. Sprint let go of its Class B
shares (not publically traded), which reduced its voting stake to
49.9% from 54%.
However, it has just paid roughly $8 million to reclaim those
shares, with CLWR desperately selling shares in order to raise
Though it is no longer the majority shareholder with less than
50%, Sprint will continue to hold onto 7 of the 13 seats on the
Clearwire board. Whether that arrangement will prove to be
awkward or not remains to be seen.
Still, the companies must continue to work together. Clearwire
signed a network parternship with Sprint at the end of 2011.
The partnership is bearing fruit, as Sprint is building the
aforementioned 4G network on LTE, a standard currently used by
) and AT&T (NYSE:
Early on Tuesday, Clearwire is trading at $1.19, while Sprint
is down nearly 5% around $2.80.
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