Clearwire Sinks; Attractive Spectrum Isn't Enough
Clearwire shares are down sharply following negative comments on the company this morning from analysts at J.P. Morgan and Stanford Group.
The company’s shares gained ground yesterday following the completion of its deal to acquire Sprint’s (S) Xohm wireless broadband business; it also closed a $3.2 billion investment from Google (GOOG), Comcast (CMCSA), Time Warner Cable (TWX), Intel (INTC) and others. But there are concerns that the company still faces daunting challenges, including a highly competitive market and a need for substantially more capital.
J.P. Morgan’s Mike McCormack resumed coverage with a Neutral rating, from Overweight previously. That’s an eye-opening change, given that Morgan was one of Clearwire’s advisers on the Sprint deal. He has a $6 price target on the stock.
