Posted by: Aaron Pressman on May 8, 2008
Clearwire (Symbol: CLWR) shareholders may have been disappointed yesterday after the mega-reorganization announcement failed to get the stock moving. But today they’ve got to be downright peeved. Citigroup analyst Michael Rollins slapped a “sell” rating on Clearwire this morning and dropped his fair value estimate to $13 from $17 (tip o’ the cap to my former boss Eric Savitz, he of the Tech Trader Daily blog). Clearwire shares are off another 12% to $14.31.
Citing possible conflicts among the many partners in the new Clearwire, a relatively modest service roll-out plan and strong comeptition expected from new cellular phone networks, Rollins concludes: “Our revised valuation analysis reflects our concern that the combined Clearwire is not pursuing a substantially larger coverage opportunity, while spreading the equity over a larger share base.”
Around the blogosphere, reaction was mixed but skeptical. Om Malik calls the deal a “spaghetti-like mess of conflicts and self-interests.” Kevin Tofel over at the winning mobile tech blog jkOnTheRun is a little more hopeful but warns that LTE, the competing next-gen wireless broadband standard from cell phone companies, could beat Clearwire to the punch. And Niley Patel at Engadget is even snarkier:
We’re not certain why Big Cable is so eager to dump money on Sprint after two previous ventures both folded recently, but if this goes down, it’s a pretty big boost for WiMAX, which was looking pretty sickly lately. Still, asking consumers to have faith in Sprint and Comcast and Time Warner Cable is pretty ballsy — between the three of them, they’ve probably burned everyone in America.