Clearwire Shares Plunged Again: 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: This has to be getting tiresome. After big declines in June, July, and August, shares of Clearwire (NAS: CLWR) closed down another 11%. This time, worries over the cost to bring Apple's (NAS: AAPL) iPhone to its parent carrier, Sprint Nextel (NYS: S) , appears to have caused the selloff.

So what: Like a climber stuck in an avalanche, investors sold on fears that fresh commitments to Apple could leave Sprint unable to provide additional financing to cash-strapped Clearwire.

Now what: It's a fair concern. The WiMAX specialist's debt is virtually equal to equity and 50% of total capital as of this writing, a structural weakness that begs for help that Sprint isn't in a position to provide. Do you agree? Would you buy shares of Clearwire at current prices? Please weigh in using the comments box below.

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At the time this article was published Fool contributorTim Beyersis a member of theMotley Fool Rule Breakersstock-picking team. He owned shares of Apple at the time of publication. Check out Tim'sportfolio holdingsandFoolish writings, or connect with him onGoogle+or Twitter, where he goes by@milehighfool. You can also get his insightsdelivered directly to your RSS reader.The Motley Fool owns shares of Apple.Motley Fool newsletter serviceshave recommended buying shares of and creating a bull call spread position in Apple. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

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