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Clearwire Shares Surge on Sprint-Softbank Deal

Sprint holds a minority stake in the wireless broadband provider


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.

So What Do We Do With Sprint Now?
So What Do We Do With Sprint Now?

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.

Article printed from InvestorPlace Media,

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