Clearwire Upsizes and Prices Public Offering

December 7th, 2011 by · 9 Comments

As I figured they do if they could, clwr has expanded the size of its public offering to $350M from its initial $300M goal. oversubscription, the usual 15%. The shares have now also been priced at $2, a discount to todays closing stock price of $2.28 but not an unreasonable one.

Meanwhile, Sprint Nextel (NYSE:S, news, filings) will match the increase, purchasing 172M additional Class B common shares. Altogether it appears that Clearwire will have raised at least $700M toward what it needs to deploy LTE on its network. That’s perhaps not enough to finish the job, but it’s more than enough to get started.

The offering will take place next Tuesday, December 13, assuming nothing else dramatic happens between now and then. The move will increase Clearwire’s outstanding share count substantially, but in this case dilution seems to be a necessary evil.  An additional $52.5M in stock will be made available for 30 days to the underwriters in the case of oversubscription (the usual 15%), and I’ll bet Clearwire hopes they sell every share.

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Categories: Financials · Wireless

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9 Comments So Far

  • Carlk says:

    What share count are you using? Google finance shows 916MM shares outstanding which would be 54 percent dilution, versus your 70 percent while I had neglected to think about the Sprint match the other day when thinking 16 percent dilution on the original offer of $300MM at two bucks chuck each. 🙁

  • Carlk says:

    Oh my, and they’re tagging it with the Level 3 moniker which has plagued its stock for nearly its eternity, i.e. the money-losing wireless broadband provider….

    I have come to the conclusion that Wall Street is incapable of being the proper stewards for the formation of capital in our markets, domestically, or globally, in order to fund promising business models expected to enhance quality of lives everywhere.

    Citizens of the globe would have a more optimistic future, excluding Wall Street, quite frankly, eliminating them entirely with a new system.

    If I had my dithers, I would give the whole lot of them their PINK SLIPS!

  • Carlk says:

    Sorry Rob. I see the fifteen percent over subscription possibility getting to your seventy percent number.

    Everybody wants to steal, and nobody wants to pay fair freight.

    Why don’t they just call it “HIGH CLASS ROBBERY” instead of “CAPITALISM”?

  • Anonymous says:

    The Bloomberg report states dilution of 33%. That’s a far cry from 70%. Rob are you sure your figures are correct? Or were you saying existing shareholders would now represent 70% of the base?

    • Rob Powell says:

      70% was just for class A and was probably misleading. I have removed the actual number for now until I figure out how exactly the class B interacts in this scenario.

  • Carlk says:

    So, we’re at roughly 41 percent dilution if the over subscription is tapped in full.

    916MM/(175+172+26.25)=41 percent

    Class B shares only reflect better voting rights for “controlling” stakeholders, Rob.

    Although a low price for the value of the underlying long term spectrum–Wall Street does not believe in long term; therefor is a farce–it’s good to see straight equity without the need to issue “bend me over” converts at some usury rate which raids operating cash flows and takes an ungodly percentage of the company at some future date in the form of dilution as well.

    What will be interesting is who, and how many buyers represent the approximate 20 percent that is not Sprint purchasing this at the feasting table inclusive of oversubscription.

  • Carlk says:

    Reiteration: Wall Street is a farce and a scam on most, if not all PEOPLES ways of lives.

    The sooner society rids themselves of their ILK, the sooner freedom and prosperity will be realized for the masses.

    Where’s the MONEY? Show me the money! Don’t ask this SOB from Goldman Sachs! He has NO CLUE, or so he says!

  • Carlk says:

    Remedy: Flog the SOB in the TOWN SQUARE(D.C.) with all eyes to see, especially his PEERS on the HILL and the Wall Street scum he is comprised of, then strip him of all his worldly ASSets and redistribute them to the whole society who he robs from directly and indirectly.

    Finally, send him to prison, and if not for life with Bubba Rock, and the less sophisticated street THUGS in JAIL, have him sentenced to a life long term of service after wards in homeless shelters where the poor, needy and deprived truly need his help.

    If he shouldn’t be able to tolerate that according to his privileged life which he abused up until now, he can turn his own lights out because the world will be a better place without him!

    Ari Onassis on “The Rule of Law”: “The rules are; there are no rules.” Interpretation: Only for rogue governments and the power brokers connected to them!

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