Clearwire's Cash Craving

Will $600 million in new capital be enough for Clearwire LLC (Nasdaq: CLWR)?

Maybe not. The wireless broadband operator has priced its initial public offering and is hoping to raise $600 million in a float today.

The company says that it will offer 24 million shares on the Nasdaq at $25 a share today. The operator laid out more details in an S-1/A filing with the Securities and Exchange Commission (SEC) on Wednesday.

But even after the IPO, the company is expecting to have to raise more capital to cover the massive expense of building and upgrading a mobile broadband network, which currently uses so-called "Pre-WiMax" technology, in the U.S. and elsewhere. The company says that it will need around $800 million to cover its costs in fiscal 2007 -- not including expenses related to buying more spectrum. (See AT&T Sells Spectrum to Clearwire.)

"We do not expect to satisfy all of our long-term capital and spectrum acquisition needs through this offering," the filing says. "We believe our cash and short-term investments afford us adequate liquidity for at least the next 12 months, although we may raise additional capital during this period if acceptable terms are available."

Clearwire has said that it will try and build out more mobile WiMax capabilities as soon as possible and start offering a PC card to users sometime this year. This will take the firm directly into competition with Sprint Nextel Corp. (NYSE: S), which plans to start offering commercial mobile WiMax services in 2008.

Clearwire initially tried for an IPO back in June 2006. The operator backed off ffrom this course when Intel Corp. (Nasdaq: INTC) and others provided the operator with an additional $900 million in funding. (See Clearwire Takes Another Cut at IPO.)

The IPO has ten underwriters, including Merrill Lynch & Co. Inc. and JPMorgan Partners . The company will trade on the Nasdaq under the ticker symbol "CLWR." (See Clearwire Wants $480M in IPO.)

Even though market conditions are rather downbeat at the moment, industry watchers are still expecting Clearwire to be a crucial IPO in the technology sector.

"The feedback that I get from my sources is that its a hot issue, the only question is how hot," comments John Fitzgibbon, Jr., publisher of IPOScoop -- a site dedicated to tracking market floats.

The stock started strong but fell by the end of the day. The stock opened up at $27.25 a share on the Nasdaq on Thursday but was off in after-hours trading late Thursday at $24.62.

— Dan Jones, Site Editor, Unstrung