Why Clearwire Shares Plunged Yet Again
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.
So what: This is the fourth daily move of at least 10% in the past five days, soaring on Monday, then plunging on both Tuesday and Thursday and again today. Yesterday, Sprint said it was seeking majority control of Clearwire by increasing its stake to 50.4%. That caused a drop because investors were disappointed Sprint didn't want to acquire the entire company.
Now what: Today BTIG points out that Sprint has owned majority stakes in the past, yet in some instances was not able to maintain control, such as not being able to stop Clearwire from opening retail stores previously, among other operational decisions. BTIG then says it would be possible for Sprint to sell its stake back down to below the 50% threshold if it's not able to gain control. The firm mentions that Sprint made a similar move last summer.
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The article Why Clearwire Shares Plunged Yet Again originally appeared on Fool.com.Evan Niu, CFA, has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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