Time Warner Cable Sheds Clearwire Stake for a Loss


The once-promising Clearwire Communications broadband consortium continues to unravel, with another major partner — Time Warner Cable — informing the company of its intention to sell its stake at a substantial discount.

In Securities and Exchange Commission filings Sept. 14, TWC said it would sell its 46.4 million shares of Clearwire on the open market at $1.40 each, or about $65 million. That is 88% less than the $550 million the media giant originally paid for the shares in 2008.

Time Warner Cable joined Comcast, Bright House Networks, Intel and Google as Clearwire investors in 2008, each buying a stake in the wireless startup valued at $20 per share. The idea was that the investment would help fund construction of Clearwire’s nationwide WiMAX high-speed wireless service, which in turn would give the cable operators access to a wireless broadband product.

Although Clearwire built out several major markets, it soon ran into cash problems and was overshadowed by another technology — Long-Term Evolution (LTE) — which has since dominated the wireless-broadband space. Clearwire shares plunged and the stock, once valued as high as $24 each in 2007, closed at $1.44 per share on Sept. 20. Earlier this year, Clearwire announced plans to build an LTE network.

In the meantime, cable operators have found a new partner in the wireless broadband game. As part of its agreement to sell its wireless spectrum to Verizon Wireless for $3.6 billion, Comcast, TWC and Bright House reached a co-marketing deal with the wireless giant that allows both sides to sell the other’s products.

TWC is just the latest of the Clearwire partners to cash out its stake; in February, Google said it would sell its 29.4 million shares for $2.26 each, or a total of $66.4 million. It had originally invested $500 million in Clearwire.

Sprint holds the biggest stake in Clearwire at 705.4 million shares (54.3%), followed by Intel with 94.6 million (14.3%); Comcast with 88.5 million (13%); Eagle River Holdings with 34 million (5.7%); and Bright House with 8.5 million (1.4%).