Shares of Clearwire Corp. (CLWR) slumped as much as 16 percent today in Nasdaq trading to touch an intraday low of $6.02, the lowest PPS since November 2009, after the company building out a high-speed WiMax wireless network disclosed it may not have enough cash to keep operating its business.
“Our expected continued losses from operations and the uncertainty about our ability to obtain sufficient additional capital raises substantial doubt about our ability to continue as a going concern,” the Kirkland, WA- based company said yesterday in a filing.
Clearwire, which may run out of money in mid-2011, also announced it is cutting about 600 of its 4,200 jobs, or 15 percent of its workforce, and suspend the launch of its Denver and Miami market. In addition, Clearwire said it plans to reduce its sales and marketing spending, and put on hold the introduction of its CLEAR-branded smartphone as part of a plan to save between $100 million and $200 million this year.
Late Thursday, Clearwire said it lost $139.4 million, or 58 cents a share during Q3. Revenue for the quarter came in at $147 million, a 114% increase over third quarter 2009 revenue of $68.8 million. During the same period a year ago, Clearwire lost $82.4 million, or 43 cents a share.
Technically speaking, the shares of CLWR are up more than 10% since the beginning of the year. However, after a strong multi-week uptrend since late August, CLWR reversed. The ticker currently trades below the support of its 20-day, 50-day, and 200-day moving averages located in the $7.03 ; $7.20 ; and $7.23 area, respectively. The stock continues to move largely lower and seems poised to test its yearly lows of $5.35.
Share action: Down 82 cents, or 11.44 percent, to $6.35 in midday trading Friday.
Approximately 8.1 million shares of the $1.5 billion market cap co. have traded hands today vs. average 60-day volume of 2.17 million shares.