Submitted by Fox First at Ten on September 28th
NEW YORK (AP) - Clearwire Corp. shares fell Friday, after it said that Time Warner Inc. had begun selling its stake in the wireless infrastructure company.
THE SPARK: Time Warner Cable, the nation's fourth largest provider of TV signals, on Friday began an underwritten public offering of all 46.4 million of its Class A Clearwire shares. The stock represents 7.8 percent of Clearwire's outstanding Class A shares and about 3.2 percent of its outstanding Class A and Class B shares.
THE BIG PICTURE: Time Warner Cable invested $550 million in Clearwire in November 2008. Clearwire was formed then by combining its assets with those of Sprint Nextel Corp. to build a mobile phone network based on WiMax technology. The technology promised faster speeds than existing cellular networks at the time.
Based on Clearwire's Thursday closing stock price of $1.48, Time Warner Cable's stake has dropped in value to about $68.7 million. That's about $481.3 million less than its initial investment.
When it originally disclosed it plans earlier this month, Time Warner Cable said it believed it was the right time to sell the shares in light of its arrangements with Verizon Wireless.
In December of last year, Time Warner Cable, Comcast Corp. and Bright House Networks said they could begin to sell Verizon Wireless services as part of a deal in which Verizon Wireless paid them $3.6 billion for spectrum that it would use to improve its cellular phone network.
THE SHARES: Down 9 cents, or 6.1 percent, to $1.39 in afternoon trading, after dropping as low as $1.35 earlier in the day. Over the past 52 weeks, the company's shares have traded between 83 cents and $2.64.
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