Friday, March 9, 2007

Clearwire 1, Shareholders 0

In response to my earlier posting on WiMax startup Clearwire, the company sold about 15% of its shares, netting $559 million in its Thursday IPO, by pushing 24 million shares instead of 20 million. The stock fell both Thursday and again Friday, meaning those who paid $25 at the IPO have already lost 11.4% of their initial investment.

Interestingly, 20 months ago the company got $900 million in strategic venture capital, including $600 million from Intel. One thing I had missed was the lopsided voting rights of the founder and strategic investors, as reported by Bloomberg:

Clearwire will have two classes of stock, a format used by some companies to ensure that founders keep control. Class A shares, which will be offered to the public, will have one vote each. Class B shares will have 10 votes. McCaw controls 52 percent of the votes, according to the filing.
Wireless Week reports that the net voting shares are McCaw 49%, Intel 30% and Motorola 4%. Other shareholders are clearly just along for the ride, and so far it hasn’t been pretty.

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