Clearwire stock tumbled nearly 16 percent Thursday, the most in almost two years, after Intel said it would sell up to 10 million shares of the company's stock.
Clearwire stock tumbled nearly 16 percent Thursday, the most in almost two years, after Intel said it would sell up to 10 million shares of the Kirkland company’s stock.
The sale of Class A shares in Clearwire, a provider of high-speed wireless service, “does not affect any contractual obligations or business arrangements between Intel and Clearwire,” Santa Clara, Calif.-based Intel said in a regulatory filing made public Wednesday.
Intel makes chips used in phones that operate on Clearwire’s fourth-generation mobile technology, called WiMax.
But Clearwire has indicated it may switch to a more commonly used standard, known as long-term evolution, or LTE. That transition would make it less valuable to Intel, said Michael Nelson, an analyst at Mizuho Securities in New York.
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Clearwire is testing LTE and plans to complete the trials by midyear.
Clearwire became a 4G wireless company in 2008 when Intel, Sprint Nextel and other investors contributed $3.2 billion in return for shares. Intel owns 102.4 million shares, according to the filing.
Since that time, the unprofitable company has struggled to meet its cash needs as it builds out the new network.
The company raised $1.56 billion from investors in 2009 and disclosed in 2010 that it had doubt about its ability to continue as a “going concern” before raising cash in a bond sale.
Clearwire stock dropped 74 cents, or 15.6 percent, to $3.99 Thursday in Nasdaq Stock Market trading, the largest decline since August 2009. The company’s stock has fallen 23 percent this year.