Clearwire Raises $600M in IPO

By Tara Seals

After months of on-again, off-again IPO plans, WiMAX operator Clearwire Corp. finally opened Thursday on the Nasdaq Stock Market at the bullish price of $27.25 per share, 9 percent above the stocks issue price of $25. But CLWR slumped a bit in midday trading, paring the gains down to $25.02. It was one of the most actively traded stocks on the Nasdaq on Thursday.

On Wednesday, Clearwires underwriters priced 24 million shares of Class A stock for $25 each, totaling $600 million. Thats a significant increase from its IPO filing with the U.S. Securities and Exchange Commission, where it said it would offer 20 million shares with an expectation of capturing $480 million for them.

The IPO puts the operators total valuation at about $4 billion. Founder Craig McCaw will retain a 49 percent voting stake and a 34 percent equity stake in the company.

The underwriters, which include Merrill Lynch & Co., Morgan Stanley and J.P. Morgan Securities, have the option to buy an additional 3.6 million shares of common stock to cover any over-allotments, for $85 million.

Clearwire has been long rumored to be going public, but cancelled a $400 million IPO last summer, choosing instead to enjoy the $900 million it raked in last year in venture funds, with primary investors that include Intel Corp. and Motorola Inc. Previous to that, the operator had raised nearly $360 million from backers that include founder Craig McCaw, Intel and Bell Canada.

Clearwire, which provides a wireless alternative to DSL and cable-modem high-speed Internet in 34 markets, is one of the largest holders of 2.5Ghz spectrum in the United States and has committed itself to WiMAX. But it also has been clear about its need to expand its footprint going forward, as it eyes a transition to mobile WiMAX; a migration that could position the operator as a competitor to the cellcos. Analysts Thursday said the cash infusion will likely go directly to building out those networks.

Clearwire has been quietly paving the way for its expansion plans. It won the government-mandated sell-off of AT&T Inc.s 2.5GHz wireless spectrum in February, agreeing to pay $300 million for airspace located in the southeastern United States. The swath constitutes one of the largest patches of 2.5GHz spectrum held by a single operator.

The 2.5GHz band is a linchpin to WiMAX deployment, being one of the few for which the WiMAX Forum has developed an implementation profile. In the United States, it is essentially the only available licensed band currently supporting certified WiMAX equipment.

Clearwires No. 1 competitor in the 2.5GHz game, Sprint Nextel Corp., last summer announced its intentions to use its own 90MHz of 2.5GHz spectrum to deliver 4G services over mobile WiMAX to 80 markets within two years potentially making for a 4G market showdown in the coming months.

AT&T Inc. www.att.com  

Bell Canada www.bell.ca  

Clearwire Corp. www.clearwire.com  

Intel Corp. www.intel.com  

Motorola Inc. www.motorola.com  

Sprint Nextel Corp. www.sprint.com