Clearwire Investors Annoyed by Sprint End Game
Pargus Capital Management Interested in Spectrum Sale
Clearwire investor Pardus Capital Management last week sent a public letter to Clearwire CEO John Stanton
, accusing Clearwire of essentially being bullied by Sprint -- and in the process ignoring more lucrative financial options. Sprint's got a 53% ownership stake in Clearwire, and the two companies had been having a rocky relationship until recently, when Clearwire suddenly jettisoned several high level executives
and signed a new wholesale agreement with Sprint
. Clearwire's also in talks with Sprint about sharing space on Sprint's not-really-secret upcoming LTE network, something that Pardus isn't too happy about. From the letter:
We find troubling some of Clearwire’s recent steps which suggest to us the company is increasingly disadvantaged vis-à-vis Sprint. In short, it appears to us that other strategic options have been delayed, downplayed or ruled out, leaving Clearwire with a cash hole in its business plan and Sprint as the only game in town to fill it. We are concerned this will lead to a network sharing deal with Sprint that does not reflect the best economics for Clearwire. Further, the structure of the network sharing deal could all but foreclose other strategic options for Clearwire, effectively giving Sprint an exclusive on an eventual take-under of the company, to the public shareholders’ disadvantage.
It seems likely that Sprint and Clearwire (and possibly LightSquared
) will inevitably become one company, especially if the AT&T/T-Mobile deal goes through. Kardus's primary interest is the cash gained from selling some of Clearwire's extensive spectrum holdings.