Clearwire Open Price Chatter

In a call placed into NASDAQ the first IPO indication times have not yet been released for when the Clearwire (CLWR-NASDAQ) IPO will hit the tape.  After talking with various traders ahead of the IPO this one is perceived to open around $28.00, but who knows for sure.  The initial talk would have likely been higher last week, but the higher share count and the market slide we saw last week are likely keeping this one fromn getting too out of control.  This has also been one of the most telegraphed deals out there.  Keep in mind on the pricing that these often change and are probably a bit more financial voodoo than they are an exact pricing science.  The company bumped up its 20 million share offering to 24 million shares and the $25.00 pricing was at the top of the $23.00 to $25.00 range.

The underwriting was led by Merrill Lynch & Co., Morgan Stanley and J.P. Morgan Securities, Inc. as bookrunners. Wachovia Capital Markets, LLC, Bear Stearns & Co. Inc., Citigroup Global Markets Inc., Jeffries & Company, Inc., Raymond James & Associates, Inc., Think Equity Partners LLC and Stifel, Nicolaus & Company Incorporated are acting as co-managers.

This is one we and many others have covered extensively.  We had noted that it was likely to either see a higher price, or a bump up in the shares, or both.  So the pricing was at the top of the range, but the shares were raised by 20%.  Keep in mind that teh company has already disclosed that it will need to raised additional capital in the markets in the near future to continue its build-outs.

Underwriters have a 3.6 million share overallotment instead of the 3 million shares originally indicated, and it is a safe bet to assume that the company will be ‘overallotting’ those.  Here was Cramer’s original IPO playbook on it.

Everyone who has been around and seen hot IPO’s and IPO’smisrepresented knows that pegging these ahead of time is relying on toomany variables.  We’ll see how high this one opens, but the weak market may be what kept the pricing from getting much higher.

Jon C. Ogg
March 8, 2007