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Ouch!   Clearwire’s future appears to be cloudy.  I was a big supporter of Clearwire’s efforts.  I still like the company.  However, the company appears to be facing tough times ahead.

Regardless of the company’s business plan and objectives, Clearwire does not appear to have the cash to last.  Clearwire needs additional capital, which it cannot raise without help from the outside.  The company does not have the resources to raise the money from within its own revenue stream.  It can go back to its owners and ask for a cash infusion but to what end?  None of this is good news.  However, what is good news is that the company has a 30-day breathing spell.  Do not get me wrong this is still a problem but in a distress situation you are grateful for any time you can get.

I am not sure what new service deals will do for Clearwire because those deals need to translate into instant cash.

Should Sprint use its own cash to save Clearwire?   The answer is that this depends on Sprint’s strategy.  Sprint could try to pick up Clearwire for a song.  However, that is not fair to current shareholders of Clearwire.  Now, if Sprint decides not to help at this moment, Clearwire could be picked up out of bankruptcy real cheap by Sprint.  Of course the overall emotional and operational damage a bankruptcy can cause to a company may render Clearwire barely functional.  In the event of a bankruptcy a bankruptcy judge could keep Sprint from even putting in a bid for Clearwire.

An alternative for a bankruptcy is Sprint buying Cleawire.  However, this does not mean that Sprint gets Clearwire cheap.  Here are the challenges facing Clearwire and all of its shareholders.  All of the shareholders are entitled to a fair return.  However, we cannot assume the shareholders have the cash or even the support of their respective stockholders to put a bid in for Clearwire.

Clearwire’s plan to be a wholesaler for the wireless industry has potential.   Can Clearwire’s plan help save the company?

Does Sprint have the cash to even consider a purchase of Clearwire?  Would Sprint even be able to raise the cash for such a purchase?  What about a Sprint-Comcast alliance to purchase Clearwire at fair value without having to bankrupt Cleawire?

At this time I have no clear idea what Clearwire should do.  I need to ponder this entire situation.  There is a lot to consider.  Bankruptcy solves a lot of problems but it also leaves equity holders high and dry.

With AT&T in a pitched battle with the FCC and the DoJ wouldn't Deutsche Telekom welcome an offer from Sprint?