Two investment banks that advised Clearwire during its transaction with Sprint (NYSE: S) Nextel have resumed coverage of the company, and are offering a not-so-bright view of the future. The transaction by itself was a positive one for Clearwire (NSDQ: CLWR). By merging its operations with Sprint’s WiMax division, it will have enough spectrum to roll-out a nationwide network. Plus, it was able to raise $3.2 billion in desperately needed cash from Google (NSDQ: GOOG), Intel (NSDQ: INTC) and a host of cable operators. However, analysts remain skeptical that the cash will be enough to fund its long-term plans and whether Clearwire will be able to differentiate itself to consumers in a deepening recession. The company’s stock is currently trading at around $4.54 a share, up 54 cents today.
Today, Barron’s reports that Morgan Stanley has resumed covering Clearwire’s stock after suspending coverage while it was advising Clearwire on it’s purchase of Sprint’s WiMax division. It’s role in the deal didn’t make Analyst Simon Flannery any more bullish on the stock. Although he remains positive on the general trend in wireless data growth, his “underweight rating,” points to his concerns. He writes: “We believe the build plan appears likely to be slowed down, reflecting in part the tough financing markets.
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