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Thursday, July 06, 2006

Clearwire: An Example of a Pulled IPO For the Right Reasons

Yesterday, Clearwire announced that Intel's (INTC) venture arm, Intel Capital, made a whopping $600M investment in the company in part of a $900 Million financing pact. Clearwire announced the sale of NextNet Wireless (its leading fixed and portable NLOS wireless broadband equipment suppliers) to Motorola (MOT) and Motorola Ventures for part of the $300 Million traunch outside of Intel's portion.

Subsequently, Craig McCaw's Clearwire has withdrawn its IPO. Back in May it filed to raise up to $400 million in security sales, but there is not much point in that IPO now. What this does is secures the launch and secures the future of Clearwire in its WiMAX deployment in many more markets in the US on a much faster timeline to most markets than would have otherwise been expected. If you get $900M under the table for undisclosed stake, why bother offering $400M in an IPO and dealing with potential market problems.

So what will be the future of Clearwire?

It may come public later. It may not. It may be acquired by a giant, by Intel, or by another wireless carrier. It may not. Which ever way it goes, what will happen is that the US consumer is going to get a true independent wireless broadband provider in what has the earmarks of potentially the first true WiMAX offering that we can count on.

This sort of company usually has to be public in technology and communications so that the full scope of the capital markets are available for growth and expansion, but they won't only have to look at an IPO as the strategy. Perhaps a dozen carriers may be interested when this comes up and starts to gain a foothold, so this will be one to watch.

If you would like to see what was written back in May, Click Here.

Jon C. Ogg
July 6, 2006

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