Google is selling off its entire stake in Clearwire for $47 million, well below the market value of the shares.
The Internet search giant is shedding all of its 29 million shares for $1.60 a pop, according to documents filed today with the SEC.
The sale price for the shares is considerably less than Clearwire’s stock price, which currently hovers around $2.
Google will get back less than one-tenth of the $500 million it first invested in the Clearwire four years ago, when it teamed up with Intel, Comcast, Time Warner Cable and Bright House Networks to pour $3.2 billion into the WiMAX provider. Google was forced to take a $1.09 billion write-down in 2009 on its investments in Clearwire and AOL.
Google declined to comment on the sell-off. Its stake comprises 6.5 percent of Clearwire’s Class A shares.
The shares will be first offered to Clearwire’s other top investors. If they decide against taking over Google’s investment, the shares will be sold on the open market on Feb. 27.
The news of Google’s divestment sent Clearwire’s shares down nearly 7 percent in morning NASDAQ trading.
A Clearwire spokesman would not speak directly to Google’s decision, but said “nothing has changed from a business perspective.”
“We’ve successfully raised billions in debt and equity to fund our business, hold one of the deepest pools of spectrum assets in the industry and renewed our wholesale agreement with Sprint,” he said. “There’s lots of good things happening.”
Clearwire has yet to make a profit, only recently addressed long-standing disagreements with Sprint about payments and financing, and has needed continual infusions of cash to stay afloat.
Sprint holds the largest stake in Clearwire and is the company’s most important wholesale customer. Nearly all of the wholesale revenue on which Clearwire depends is derived from Sprint.
Clearwire sorted out an arrangement with Sprint toward the end of last year and changed its technology strategy to overlay its WiMAX network with LTE, for which in needed hundreds of millions in additional funding.