Clearwire (NASDAQ:CLWR) shares spiked in Monday trading after Japan’s Softbank (PINK:SFTBY) announced plans to acquire a 70% stake in Sprint Nextel (NYSE:S).
Softbank’s investments to grow Sprint’s network are likely to trickle down to Clearwire, in which Sprint has a 49% stake, MarketWatch noted. Clearwire operates the wireless broadband network used by Sprint’s 4G service.
Investors shared the optimism. Clearwire shares surged more than 15% in Monday morning trading.
Fallout from the deal wasn’t confined to Clearwire. AT&T (NYSE:T) shares slipped 1%, while Verizon (NYSE:VZ) shares were mostly flat in Monday trading as the top two U.S. wireless networks faced the prospect of an invigorated Sprint.
Meanwhile, shares of MetroPCS (NYSE:PCS), which recently announced plans to be acquired by Deutsche Telecom (PINK:DTEGY), parent of T-Mobile USA, fell more than 2% as the merger seemed to end any chance Sprint would bid for the company.
Under terms of the acquisition, Softbank will invest $8 billion in Sprint. Analysts expect that to finance a faster roll out of Sprint’s next-generation wireless network.
Faster data service from the enhanced network would help Sprint compete with AT&T and Verizon nationwide.
Comments are currently unavailable. Please check back soon.