Clearwire shares rise on hopes of funding deal
(Reuters) - Clearwire Corp (CLWR.O) shares rose more than 1 percent after the wireless service provider said its new chairman is acting as a strategic adviser, raising the possibility that it soon might raise more money.
Clearwire, which is 54 percent owned by Sprint Nextel (S.N), must raise billions of dollars to complete a high-speed wireless network and help it compete with bigger rivals such as Verizon Wireless.
The company's new chairman Ben Wolff is also an adviser and would get a fee if Clearwire enters any transactions on which he advised, Clearwire said in a document filed with the U.S. Securities and Exchange Commission on Tuesday.
Investors see the agreement as a sign that the company has new funding in its sights, said Mizuho Securities analyst Michael Nelson.
"I think Wolff took the assignment thinking he had a high likelihood of making the deal," Nelson said.
He said it's more urgent now that Clearwire expand its network because its competitors are marketing their own high-speed wireless services.
Wolff replaced the company's founder Craig McCaw as Clearwire's chairman on January 6.
Clearwire is considering funding options, including selling spectrum, or an equity investment from Sprint or T-Mobile USA, which would rent space on Clearwire's network at lower rates.
Sprint uses Clearwire's network to operate its high-speed wireless service. T-Mobile USA, a unit of Deutsche Telekom (DTEGn.DE), has said it needs more airwaves.
Verizon Wireless, a venture of Verizon Communications (VZ.N) and Vodafone Group Plc (VOD.L), has built a high-speed wireless network and plans to start selling phones for it starting in March.
Clearwire shares were up 10 cents, or 1.74 percent, at $5.86 in morning trading on Nasdaq.
(Reporting by Sinead Carew. Editing by Robert MacMillan)
Credit: Reuters (www.reuters.com)
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