NEW YORK (WiMAX Day). Following a week of plummeting share prices, and nervous investors, the American WiMAX services provider Clearwire made a stunning debut on the Nasdaq stock exchange in New York yesterday. The IPO was underwritten by Merrill Lynch, Morgan Stanley and JP Morgan.

In the largest and most sought after IPO of 2007, which is said to have been six to seven times oversubscribed, Clearwire sold 24 million shares at a price of $25 per share. The sale adds $600 million in cash to the Clearwire coffers, and gives the company a market valuation of just over $3.9 billion.

While the average investor was anxious to participate in the Clearwire offering only because it is the second largest venture of entrepreneur Craig McCaw, most savvy institutional investors, who gobbled the majority of the shares offered, invested in the merit of the Clearwire business — its spectrum portfolio, WiMAX technology, business model, and business partners.

Shareholder structure
According to the most recent filing with the SEC, the largest shareholders in Clearwire include Mr McCaw, Intel, Motorola and Bell Canada.

Following the float yesterday, McCaw owns 24.8 percent of the class A stock and 65.4 percent of the Class B stock. Intel owns 26.4 percent of Class A stock and 34.6 percent of Class B stock. Motorola hold 12.9 percent of Class A and Bell Canada hold ten percent of the Class A.

That actually leaves a very small portion of the company that is in public hands, and with very little voting power. Each of the Class B shares provide ten times the voting rights of a Class A share, into which the Class B shares convert.

Burning cash, gaining subscribers
According to the latest documents filed with the SEC, Clearwire will use proceeds from the IPO to fund further expansion of its business. This includes acquiring spectrum and building its network.

Easrlier this month, Clearwire acquired nearly 2 billion Mhz/POPs from AT&T for $300 million. There is not a lot of such spectrum left in America waiting to be purchased, however some analysts speculate that Clearwire can easily spend the same amount over the next year hoovering small spectrum owners in America, and in foreign auctions.

With a total loss of $495 million as of last December, Clearwire may very well double that amount in the next two years. However, with 206,000 subscribers already generating revenue, and a projected 400,000 subscribers by year-end 2007, most analysts are bullish on the future performance of Clearwire and believe the company will become profitable in early 2009.