Today’s Clearwire downgrade came from Jefferies & Company with a downgrade to “Hold” from “Buy”. The real blow is that the price target objective was lowered from $4.00 to $2.00. It is hard to take much joy that after a 4% drop to $1.48 that this still implies almost 35% upside on the post-downgrade share price. Clearwire has traded in a range of $1.24 to $5.47 over the last year and its market capitalization rate is down to about $669 million.
The move by the analyst comes just two days shy of the wireless data provider’s expected earnings report and only one day ahead of the expected earnings report from Sprint Nextel Corporation (NYSE: S).
RadioShack Corporation (NYSE: RSH) just hit a two-decade low today after posting an unexpected loss rather than a small positive earnings report. RadioShack’s report was marred in part because it sold fewer of the high-priced Sprint mobile plans and that reflects more pressure all over again for Sprint and ultimately for Clearwire even if Sprint shares are up 2% ahead of earnings as it is likely that the short sellers are covering their shorts ahead of earnings.
Unfortunately, Clearwire has its woes and the fallout from upstream is just too much.
JON C. OGG
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