This post was just published on ZYX Buy Change Alert.
We recognize that some of our subscribers have doubled their money in CLWR. As tempting as it is to take profits here, it is advisable to hold for bigger gains. Of course there are no guarantees.
The offer for CLWR should be at least 50% higher.
Sprint (S) disclosed that its board authorized management to proceed with discussions with Clearwire (CLWR) with the intent to attempt to reach a definitive agreement for a potential merger transaction. Sprint stated it understands that the board of Clearwire has formed a special committee that is reviewing the proposed transaction. Pursuant to the proposal, Sprint would acquire all of the shares of Clearwire common stock not already owned by the Sprint Entities at a purchase price of $2.90 per share. Sprint has proposed to provide interim financing to Clearwire from and after the execution of definitive documentation relating to the transaction in an amount up to $800M. Sprint has provided the proposal to SoftBank for its review. Under the terms of the Sprint proposal, each of Comcast, the BHN Entities and the Intel Entities would enter into a voting and support agreement with Clearwire with respect to the proposed transaction. Sprint estimates that, at the price per share set forth in the proposal, approximately $2.1B in cash will be required to acquire the remaining shares of Clearwire. Sprint anticipates that it will obtain such funds from working capital.
What To Do Now?
Those holding the stock may continue to hold and add a small quantity to the position on any dip towards $2.90.
Those not in the stock may initiate a small position on any dip towards $2.90.
Keep some powder dry to add if stock dips below $2.90.
