Time Warner Cable Inc. (TWC) has disclosed plans to sell its entire 7.8 percent stake in wireless broadband services provider Clearwire Corp. (CLWR). Shares of Clearwire declined almost 5 percent in Monday's regular trading session.
Time Warner said in a regulatory filing Friday that it has informed other major Clearwire investors of its decision. Sprint Nextel (S) is Clearwire's largest shareholder, while Intel Corp. (INTC) is also an investor in the company. These investors have an option to buy all or part of Time Warner's stake.
However, if the other investors do not buy all of its stake, Time Warner Cable plans to sell its shares on the open market starting Monday.
Time Warner Cable acquired 46.40 million shares of Clearwire for $550 million in 2008, but the shares are worth only more than $72 million at current prices.
The company had acquired the stake to help fund a mobile phone network based on Wimax technology. But the joint venture with Sprint has struggled to gain subscribers.
In December 2011, cable operators Time Warner Cable, Comcast Corp. (CMCSA) and privately-held Bright House Networks agreed to market and sell Verizon wireless service to customers. The move was part of a $3.6 billion deal under which Verizon Wireless agreed to acquire advanced wireless spectrum from SpectrumCo. LLC, a joint venture between the three cable operators.
Verizon Wireless and rival AT&T Inc. (T) are seeking to boost their share of wireless spectrum amid increasing sales of smartphones and other wireless devices. Verizon Wireless launched its 4G network in the U.S. in December 2010.
TWC closed Monday's regular trading session at $92.10, down $0.28 or 0.30 percent on a volume of 2.00 million shares.
CLWR closed Monday's trading at $1.54, down $0.08 or 4.94 percent on a volume of 5.71 million shares. In after-hours, the stock further declined $0.04 or 2.60 percent to $1.50.
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