Google takes a bath on Clearwire investment, loses $433.5 million

Google takes a bath on Clearwire investment, loses $433.5 million
Maybe Google should ask the baby in the crib who does those E-Trade commercials for some investing help. In a recent filing with the SEC, the Mountain View based tech giant said it sold its 29.4 million shares in Clearwire for $2.26 a share. The sale brought in $66.5 million out of an original investment made in 2008, of $500 million. The red ink amounts to $433.5 million. While high, it is better than the $453 million loss originally projected by Google. Clearwire said it was not involved in the sale, which was done in the open market, and thus refused to comment. For its part, Google did not have anything to say although the filing with the SEC last month said that the company occasionally rebalances its investment depending on its goals and market conditions at the time.

Could Google get better investing advice from this baby?

Could Google get better investing advice from this baby?

The sale by Google of its Clearwire stake is a sign that the industry coalition that combined to give Clearwire $3.2 billion in capital is slowly exiting from the investment. Intel remains an investor although it sold 10 million shares last year. Sprint is the largest shareholder in Clearwire and owns 54% of the company. In recent months the carrier added $331.4 million of additional funds as part of a round of financing that raised $1.1 billion for Clearwire. Despite raising all of that cash, Clearwire says it will last until the end of this year and will have to raise more funds after that. The problem is that the company is not generating positive cash flow and will remain in a drawdown position over the next 12 months.

source: WSJ via FierceWireless

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9 Comments

1. squallz506

Posts: 1075; Member since: Oct 19, 2011

clearwire is being investigated by the better business bureau for bait and switch. i think taking the loss is worth distancing themselves from clearwire.

3. cepcamba

Posts: 717; Member since: Feb 27, 2012

Thumbs up. You beat me by a minute. But basically the same thought.

5. squallz506

Posts: 1075; Member since: Oct 19, 2011

have you read these? http://clearwiresucks.com/blog/ clearwire is a joke. they advertise unlimited 4g, but they throttle down to .2mbps down.

6. cepcamba

Posts: 717; Member since: Feb 27, 2012

They're not only throttling speeds they also modify TOS for consumers to reflect their new policies. They have a ton of issues actually. If you ask me it all boils down to false advertisement.

7. squallz506

Posts: 1075; Member since: Oct 19, 2011

apparently they have double billed and it is routine for customer service to take CC info and charge it before revealing the amount that is going to be charged. from the reports the CS is a joke. basically just telling you to reposition/restart your modem and call back later, so that they can tell you to restart your modem again. all of those reports point towards horrible CS, horrible billing dept, horrible dl speeds, throttling without any specific cap. good move google.

2. cepcamba

Posts: 717; Member since: Feb 27, 2012

Google is seeing their Clearwire investment as a falling property. With other networks getting messed up (rumored) because of it, Google might be avoiding a possible law suit that can make their share value even less.

4. itiswhatitis

Posts: 423; Member since: Jan 23, 2012

They're no fools, i believe they know what they're doing!!

8. -box-

Posts: 3991; Member since: Jan 04, 2012

In short, Sprint and its associates continue down their losing path... and no one is surprised

9. lsutigers

Posts: 832; Member since: Mar 08, 2009

Im not aware of the Clearwire throttling issues but my Sprint 4G (which runs on the same network) is definitely not throttled. I consistently average 8-10mbps.

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