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Clearwire: WiMax Rollout Begins, Signifies Industry Changing Potential

by: Andrew Snyder October 08, 2008 | about stocks: CLWR / S    

Andrew Snyder

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It is hard to get back to fundamental investing after all of this psychological turmoil has disrupted the markets. But with all major American indices virtually flat today, it is apparent the markets are worn out and ready to get back to some semblance of normalcy.

We must get back to basics. That means uncovering news stories, following earnings reports, and searching for undervalued treasures. It looks as though I may have found one in Clearwire Corporation (CLWR).

The company is making news with its partnership with Sprint Nextel (S) that focuses on creating a WiMax blanket across the country. Thanks to funding from industry heavy-hitters like Intel, Google (GOOG), Comcast (CMSCA) and Time Warner (TWC), the firms’ vision of a nationwide wireless Internet connection, or at least the very first step, is about to come true.

When folks from right here in Baltimore wake up today, there will be something new in the air. They will not be able to feel it. They won’t be able to smell it. And they won’t be able to hear it. But it will be there and it will allow them to wirelessly connect to the Web from nearly anywhere in the quickly growing city.

It is about time

Clearwire and Sprint have had an on-again-off-again partnership relating to the WiMax role out, but thanks to the industry funding I mentioned above, the revolutionary technology is finally making its way onto the market. Today’s role out in Baltimore will be the first of its kind in the country.

If it is successful, cities like Chicago and Washington D.C. will be the next to go online and eventually the entire country will have access to the signal. More importantly, if the new wireless network is successful, Clearwire (which is expected to purchase Sprint’s share of the program later this year) will do quite well.

Right now, the company is valued at $1.3 billion. If it can monopolize the nation’s wireless Internet market, that valuation will increase multi-fold. Thanks to the country’s economic turmoil, investors have a shot at Clearwire at a discount. Right now, shares are trading for just under $10. Last week, they were worth $12.50.

If the introduction of WiMax in Baltimore is a success, Clearwire could be catapulted to the top of its industry. There are few competitors moving in the same direction and huge possibilities for the company if it decides to grow.

Clearwire could provide everything that is great about the Internet on an entirely mobile network. Information, phone service, email, movies, news, and so on would be available anywhere under the WiMax blanket.

It is easy to see why investors need to keep a close eye on this company and its stock over the next few days. Today’s unveiling will turn out to be a make-or-break situation for the young company.

While the rest of the world is trying to guess at the Fed’s next gesture or figure out which way the markets will move next, you have a shot at traditional profit potential. Start studying Clearwire and keep a close eye on the company’s action over the days and weeks ahead.

The company is taking a big gamble that has the potential to pay huge rewards.

Disclosure: none

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This article has 8 comments:

  •  
    Oct 08 07:42 AM
    The pricing looks good, it's the coverage and reliability that will determine success.
    Reply
  •  
    Oct 08 07:57 AM
    Revolutionary? WiMAX is just another broadband wireless technology that will compete for subscribers with the much better supported/funded technologies on the 3G/4G roadmap of the cellular carriers and device makers. Clearwire has has only modest penetration with their pre-standard WiMAX rollouts, and only in markets that are underserved by DSL, cable, and fiber for home use. So hold off on your enthusiasm until you see some track record here. Can you even identify any desirable consumer devices? Any "revolutionary&qu... pricing?

    I'm out of the wireless business now and not a big fan of the carriers and their business practices. But I have no reason to get excited about this.
    Reply
  •  
    Oct 08 09:22 AM
    This technology looks very promising to me.
    Reply
  •  
    Oct 08 11:49 AM
    Check the link below if you are looking for devices....

    www.intel.com/inside/
    Reply
  •  
    Oct 08 12:06 PM
    Hold on tight customers, time to experience some problems with this junk from Clearwire!

    It's not the technology, just the company from what I'm reading about complaints (clearwiresucks.com/blo.../).
    Reply
  •  
    Oct 08 02:06 PM
    You are incorrect that Clearwire will acquire Sprint XOHM assets. Sprint will own 51% of the new Clearwire and keep the Clearwire name.

    WiMAX will succeed because within a year, people will be buying WiMAX products and not even know it. Sprint won't even have to market it. The device makers will.

    WiMAX will be standard on laptop within a year. MP3 players, GPS devices, cameras and other device will have WiMAX in a year or two. People will be buying these products and not even know WiMAX is in it. Once Sprint can say there are all of these millions of devices out there that they didn't even have to sell, they'll be able to convince investors more easily to fund the US rollout even further.
    Reply
  •  
    Oct 08 08:20 PM
    WiMax is not a free offering so believe me, people will have to know it's on their devices or it won't connect. It will also not be available all over the country in my opinion until well after LTE launches...& then it will have lost whatever little time to market advantage it had.
    Reply
  •  
    Nov 10 09:03 AM
    Wimax looks extremely promising, I can't imagine how this venture would fail.
    Reply
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