Clearwire Surges After LightSquared’s Rejection: Seattle Mover
Clearwire Corp. (CLWR), the unprofitable wireless broadband service provider, rose to the highest in two months after regulators rejected billionaire Philip Falcone’s bid to use satellite spectrum for his LightSquared mobile network venture.
The Federal Communications Commission said yesterday it now plans to withdraw the preliminary approval it granted last year after an Obama administration adviser found that the service disrupts navigation gear used by planes, boats and autos.
The rejection threatens to unravel LightSquared’s agreements with more than 30 wholesale customers that had planned to use the high-speed wireless network. That potential business is now up for grabs for competitors.
“With LightSquared firmly out of the picture, we believe carriers have to start dealing with Clearwire,” Jonathan Chaplin, a Credit Suisse Group AG analyst who rates Clearwire “outperform,” wrote in a note today.
LightSquared disputes the findings and said it was working on a resolution to the GPS signal interference.
Clearwire, based in Bellevue, Washington, gained 5.2 percent to $2.41 at 10:30 a.m. in New York after touching $2.48, the highest level since Dec. 7. The shares had slumped 61 percent in the past year through yesterday.
Less than 14 hours after the FCC issued its statement, former LightSquared customer FreedomPop named Clearwire as its new mobile broadband provider for faster, so-called fourth- generation services. FreedomPop, a mobile data and phone service based in Los Angeles, is the latest effort from serial entrepreneur Niklas Zennstrom, who co-founded Skype Technologies SA with Janus Friis, and later sold it to EBay Inc. (EBAY)
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