Clearwire Shares Tanked: What You Need to Know
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 WiMAX network operator Clearwire (NAS: CLWR) are bouncing all over the place today, tanking by as much as nearly 29% after carrier partner Sprint (NYS: S) provided an important update on its network strategy.
So what: Sprint detailed its plans to aggressively roll out its 4G LTE network on an accelerated timeline and said that it may stop selling devices for Clearwire's WiMAX network at the end of 2012. As Clearwire's biggest customer, the move would cripple Clearwire's prospects since the company has already bet heavily on the wrong horse.
Now what: LTE has emerged as the victorious 4G technology, with larger carriers AT&T (NYS: T) and Verizon (NYS: VZ) officially adopting LTE and beginning to roll out their own networks. Sprint CEO Dan Hesse gave Clearwire a little hope when he said, "We signed an agreement which takes us through 2012 already. We are hopeful we can extend and expand that." The lesson here is that being first to market sometimes isn't enough.
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At the time this article was published Fool contributorEvan Niuowns shares of AT&T, but he holds no other position in any company mentioned.Click hereto see his holdings and a short bio.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 Motley Fool has adisclosure policy.