Northern,WI  10-16-2012 (BasicsMedia)  —  Clearwire (NASDAQ:CLWR): Down 17% Can You Say Island Top?  Rarely in Tecnical Analysis do you see patterns like this one.  They occur at bottoms and tops and they happen when shares gap higher ..trade higher for that day…and then gap lower in the morning ( the opposite happens at bottoms..in this case we are talking about a top in Clearwire) creating a gap around this top.  It is called an Island Top and it predicts lower prices.  In this case it matches the fundamentals for now (Technical Analysis usually predicts fundamental action) as SoftBank ejected CLWR as part of the current negotiations for Sprint (NYSE:S).  Telecom consolidation through the years often leaves some for dead on the side of the road.  In this case it may be Clearwire as it carry’s a lofty $1B MarketCap even at these low prices meaning you have many,many shares out for the purported 4G leader.

 

Softbank is prevented from doing further deals under its banks’ covenants during that time, while Sprint is prohibited from doing so under the merger contract, said one of the people. Clearwire shares fell as much as 20 percent today after doubling in the prior three trading days on speculation of an imminent takeover.  While a decision hasn’t been made, Sprint doesn’t need to own Clearwire because it already has access to its spectrum and it’s too expensive, said two people close to the takeover.  “Sprint doesn’t need to own Clearwire now, as they already paid $900 million to lease the spectrum they need for 2012 and 2013,” said Robert Chapman, founder of hedge fund Chapman Capital LLC. “Sprint may be better off buying 700 megahertz spectrum.” Chapman is “short” on Clearwire, meaning the firm will profit if Clearwire’s shares fall.

Clearwire Corporation, through its subsidiaries, provides fourth generation wireless broadband services in the United States. The company builds and operates mobile broadband networks that offer high-speed mobile Internet and residential Internet access services. It serves retail customers through its CLEAR brand. The company markets its products and services directly to consumers, as well as through cellular retailers, consumer electronics stores, satellite television dealers, and computer sales and repair stores; and through company-operated retail outlets. As of December 31, 2011, it had approximately 1.3 million retail and 9.1 million wholesale subscribers. The company is headquartered in Bellevue, Washington. Clearwire Corporation is a subsidiary of Sprint HoldCo LLC.

Disclaimer:  We have no position in CLWR nor are we paid to write about them.

 

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