Google drops Clearwire permanently

So long, farewell, auf wiedersehen, goodbye.

Shares of Clearwire were trading lower on Friday after a filing showed that Google is looking to sell its entire position in the wholesale mobile broadband provider. Google will sell its 29.4 million shares for $1.60 each, totaling $47.1 million, a 91% discount to its initial investment. The total loss for Google will be over $450 million.

The filing read, “Google periodically rebalances its investments based on its goals and its evaluation of market conditions.” The news comes a week after Clearwire warned that it may need to raise more capital to fund its operations and that it could no longer offer debt secured by its network assets. In January, the company issued a $300 million bond with a coupon of 14.75%, more than 500 bps higher than debt issued by lower-rated bond issuers.

Google, Clearwire and other shareholders Sprint (S), Comcast (CMSCA), Time Warner (TWC) and Bright House Networks declined to comment. An Intel (INTC) spokesman said that the company had no interest in increasing its 7.3% stake in the company, and that it had written down the value of its 65.6 million Class B shares to zero.

Clearwire (CLWR : NASDAQ : US$2.11), Net Change: -0.16, % Change: -6.84%, Volume: 23,414,836
Google (GOOG : NASDAQ : US$609.90), Net Change: 3.79, % Change: 0.63%, Volume: 1,875,235

Canaccord Genuity Inc. is a global investment banking and institutional brokerage firm. Their website is www.canaccordgenuity.com.

For disclosures of any equities mentioned here please see: http://www.canaccordgenuity.com/en/ODD/pages/disclosures.aspx.

About the Author

Canaccord Genuity Inc. is a global investment banking and institutional brokerage firm. Their website is www.canaccordgenuity.com.

For disclosures of any equities mentioned here please see: http://www.canaccordgenuity.com/en/ODD/pages/disclosures.aspx.

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