IPO Filing Update: Clearwire Corp. (CLWR)

The most recent filing for Clearwire is now out, and the company ended with over 206,000 subscribers as of December 31, 2006.  It also said that it estimates an average monthly increase in subscriber penetration rates to 0.5% to 0.7% (new subscribers divided by number of households their network are covered).  The company believes that its network areas combined represents about 9.6 million in people in the US and EU; and the US portion is roughly 34 markets and 350 municipalities covering some 8.6 million people.

Intel (INTC-NASDAQ) has agreed to jointly develop, market and promote its WiMAX service in the US.  The company notes that despite a deficit in capital and despite debt of $755+ million that it has adequate liquidity for the next 12 months.  It may raise capital and it expects more capital needed to fund build-outs.

Craig McCaw owns 52% of the combined company now, and Intel (INTC) owns 32%.  The company will effect a reverse split before coming public and will still maintain Class A shares and Class B shares.  This will trade under the "CLWR" ticker on NASDAQ and it has a rather large underwriting group: Lead underwriters are Merrill Lynch, Morgan Stanley, and J.P.Morgan; Others in the syndicate are Wachovia, Bear Stearns, Citigroup, Jefferies, Raymond James, ThinkEquity, and Stifel Nicolaus.

The company now generates more revenue from services than it does from equipment sales and that was broken down as $43.855 million and $32.583 million respectively as of the 9-months ended September 3, 2006.  As noted, the company will need to raise additional cash outside of the IPO to fund expansion and it anticipates issuing debt.  If you wish to peruse the amended filing for more details you can access the filing here.

Jon C. Ogg
January 30, 2007