Clearwire Corp. (CLWR:US), the unprofitable company building a high-speed wireless network across the U.S., rose after Crest Financial bought a 7.9 percent stake and said the shares are undervalued.
Crest Financial may seek to add directors to the board, though it has no agreement with Clearwire yet, the Houston-based investment firm said in a filing on June 1.
Clearwire advanced 3 percent to close at $1.19 in New York. The stock has dropped 39 percent this year.
The rally follows a 40 percent decline in the stock price this year, dragged down by concerns that the company doesn’t have enough money to build out its network. It had $1.4 billion in cash and short-term investments as of March 31, an amount that isn’t sufficient to fund cash-flow shortfalls and interest expense through 2013, according to Dave Novosel, a senior bond analyst at Gimme Credit LLC in Chicago.
Sprint Nextel Corp. (S:US), the third-largest U.S. wireless carrier, is an investor in Clearwire and relies on the company’s network. Sprint holds a 50 percent financial interest and a 47.1 percent voting interest in Clearwire.
Susan Johnston, a spokeswoman for Bellevue, Washington- based Clearwire, declined to comment.
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