Clearwire Corp Shares Dive 15% Despite CEO's Q4 09 Faith

Clearwire Corporation (NASDAQ:CLWR) shares are down 15% in the low $7 range today with massive volume and selling helping to drive shares of the deep end after the company dissappointed the Street with a Q2 2009 loss, despite maintaining their 2009-2010 outlook.  So do you believe the CEO or do you go with the masses?

Its only 1:45 PM and volume on Clearwire shares is already at 3.56 million compared to the daily average of 800,000 to 1.2 million.  Yesterday Clearwire Corp.  reported a loss of $73.4 million, or 38 cents a share, for the quarter that ended June 30. This compares with a loss of $74.6 million, or 40 cents a share, last year.  Eleven analysts surveyed by Thomson Reuters First Call reported a consensus estimate for a loss of 39 cents a share for the quarter.

Revenue for the quarter was $63.6 million or 8.6%, up from $58.6 million last year.  Amazingly, Clearwire added 12,000 subscribers in the quarter for a total of 511,000 subscribers.  Clearwire said it completed the quarter with $2.5 billion in cash and short-term investments.

Despite a slowdown in its second-quarter subscriber growth, Clearwire CEO Bill Morrow expects business to pick up in the fourth quarter.

“Given our planned launch schedule and assuming similar initial consumer responses in new-built markets, we anticipate fourth-quarter net subscriber additions will be substantially higher than all other 2009 quarters combined,” Morrow said in a conference call with analysts.

Clearwire is in the midst of a massive buildout of its mobile WiMAX network, which now covers 23.1 million people in multiple markets including Las Vegas and Portland, Ore.

So far this year, the company has spent $646 million on its network. The company plans to spend between $1.5 billion to $1.9 billion this year and says it is on track to reach its previously stated goal to cover 120 million people in 80 markets by 2010.

Clearwire is backed by an impressive roster of investors, including Sprint, Comcast, Google and Time Warner. Clearwire has begun reselling its WiMAX service to some of its investors, a move that is a major part of its business strategy

Clearwire did not provide any guidance for next quarter but has not pulled back on their predictions for 2009-2010 outlook, so do you put your faith in WiMax?

Time will tell.

DISCLAIMER: NO POSITIONS IN ANY OF THE SECURITIES MENTIONED IN THIS PUBLICATION.