Clearwire Shares Jumped: What You Need to Know

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of wireless broadband service specialist Clearwire (NAS: CLWR) spiked as high as 10% on Wednesday after the U.S. government sued to block AT&T's (NYS: T) proposed $39 billion acquisition of T-Mobile USA.

So what: The government said that proposed deal would "substantially lessen competition," suggesting that relatively weak players like Clearwire and its big partner Sprint (NYS: S) will gain some much-needed breathing room in the increasingly cutthroat telecom space. It's been a crazy few weeks for Clearwire, popping big on buyout rumors and plunging steeply on debt fears, so today's bit ofnews might just serve as somewhat of a stabilizer for the shares.

Now what: I wouldn't get too excited about Clearwire just yet. The government's suit is only the first step in its attempt to block AT&T's buy, and analysts are suggesting that the company could still close the deal if it agrees to shed some overlapping wireless assets. When you add that to Clearwire's sunsavory fundamentals, staying on the sidelines seems like an easy decision.

Interested in more info on Clearwire?Add it to your watchlist.

At the time this article was published Fool contributorBrian Pacamparaowns no position in any of the companies mentioned.Motley Fool newsletter serviceshave recommended buying shares of AT&T. Try any of our Foolish newsletter servicesfree for 30 days.We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Fool'sdisclosure policyalways gets a perfect score.

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