Why Clearwire Plunged
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: Big Red is putting up some of its wireless spectrum in the 700 MHz frequency band as it hopes to gain regulatory approval to buy a different slice of spectrum from cable operators. Adding to the availability of wireless spectrum could reduce the value of other holders of spectrum like Clearwire and DISH Network (NAS: DISH) .
Now what: Both Clearwire and DISH are feeling selling pressure on the news, as their respective spectrum holdings comprise a sizable chunk of their value. At the end of last year, Clearwire valued its spectrum holdings at almost $4.3 billion -- nearly 49% of its total assets on the books. The company already has more than $4 billion in long-term debt. It's a real danger if the company's largest asset should take a hit.
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At the time this
article was published Fool contributorEvan Niuowns shares of Verizon Communications, but he holds no other position in any company mentioned.Click hereto see his holdings and a short bio. The Motley Fool has adisclosure policy.
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