This is a move that I think we all saw coming eventually. Sprint has reduced it’s stake in clear wire from 50% to 49.8%. A move that makes Sprint less likely to be held accountable if Clearwire defaults. Most importantly though is that Sprint maintains 54% of the economic stake in Clearwire. See what was happening was investors were worried that if Clearwire was to default (go under) that Sprint would end up having to pay that money back.
With them removing themselves as a power player in voting they can now say – “Hey we had nothing to do with them going under”… By Sprint also doing this action Sprint is proactively providing protection and flexibility with respects to its debt agreement and eliminating ongoing investor concerns about any potential cross-default risk.
This action only affects Sprint’s voting interest as a shareholder of Clearwire and does not affect Sprint’s other governance rights, nor does it reduce Sprint’s economic interest in Clearwire, which remains the same.
So PPCGeeks, that should not come as a shock to you. Sprint has been in talks of making LTE based moves – could this be the first sign? Tell us your thoughts and opinions about this move. Do you think it has any merit as to what Sprint will do with WiMax or LTE? Tell us below….
Source: fiercewireless