Investors have a wide range of technology stocks to choose from, and Clearwire Corp. is set to add more WiMax to the list when it offers 20 million shares for sale at between US$23 and $25 on the Nasdaq Stock Market LLC.
The Kirkland, Washington, wireless broadband provider issued a preliminary prospectus on Tuesday for a share sale with the U.S. Securities and Exchange Commission (SEC). It said it planned to launch the public offering as soon as possible after the share sale is registered.
Clearwire will become one of just a few WiMax companies listed on a U.S. stock market, and one of the most high profile due to its relationships with Intel Corp. and Motorola Inc. The listing may also be a sign that word of WiMax technology is spreading. The popularity of sipping coffee at Starbucks while reading e-mails on a laptop PC has grown along with wireless technologies such as Wi-Fi. WiMax aims to replace Wi-Fi as a speedier service with far wider ranging access.
Clearwire will list under the stock ticker code, CLWR.
Clearwire is also offering 3 million additional shares to the investment banking firms underwriting the sale, and if all 23 million shares sell out at the mid-range price, $24, Clearwire will pocket $513 million from the sale, it said in the SEC filing.
The money will mainly be used to finance its business. It has spent millions expanding its WiMax network, and expects to need more to continue growing.
"As Clearwire is at an early stage of development, we cannot anticipate with certainty what our earnings, if any, will be in any future period. However, we expect to incur significant net losses as we develop and deploy our network in new and existing markets, expand our services and pursue our business strategy," it said in the filing. The company has lost money ever since it opened, and estimated its total indebtedness as of Sep. 30, last year, at approximately $755.7 million.
But the company has some big backers to help keep it running, mainly companies promoting WiMax.
Intel's venture capital arm invested $600 million in Clearwire last year in one of its single biggest deals ever. Intel Capital commonly invests in companies tied to Intel strategies aimed at growing its core microprocessor business. WiMax has been a major push for Intel over the past few years. The company's line of Centrino notebook PC chips, which put Wi-Fi into portable PCs, was wildly successful on the market, and some analysts say the company could be a big winner with a similar chip package developed around WiMax.
Clearwire and Intel have also agreed to jointly develop and promote a mobile WiMax service offering as a co-branded service available only over Clearwire's WiMax in the U.S., according to the prospectus, to target users of laptops, ultramobile PCs, and other mobile devices.
Once Clearwire completes its share sale, Intel will still hold a 26.6 percent stake in the company, or 36.76 million shares, while Motorola will hold a 12.9 percent stake, or 16.67 million shares, according to the prospectus. Clearwire sold its wireless broadband equipment business to Motorola last year, and indicated in the prospectus that it will rely on Motorola to supply equipment for its network.
Clearwire currently offers broadband wireless services in the U.S. and Europe. Its subscribers rose to 206,000 as of the end of last year, from just 1,000 on Sep. 30, 2004, it said. Its subscriber base has grown despite wireline alternatives for users, including broadband cable modems and DSL (digital subscriber line) Internet service.
As of the end of last year, Clearwire services were available to 9.6 million people, including 8.6 million throughout the U.S., and one million in Brussels, Belgium and Dublin, Ireland, the company said.
WiMax base stations can send broadband Internet signals to far greater distances than the Wi-Fi technology that WiMax is meant to replace. Although estimates vary on how far WiMax signals can go, in densely populated cities, where users are not likely to be positioned within sight of access points, the distance should be between 2 km and 4 km.
A few of the other listed companies in the WiMax field include device maker Proxim Wireless Corp., service provider Alltel Corp., and WiMax network equipment maker, Alvarion Ltd. The stock ticker codes of the three companies are PROX, AT, and ALVR, respectively.