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CLWR hit $2.15 per share last Friday, |
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but what's interesting is its volume. |
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Released on Monday, December 12, 2011, 8:00 AM ET
Pittsburgh, PA (SpeculatingStocks) - Clearwire Corporation (NASDAD:CLWR) just hit $2.15 per share (7:59 PM EST, December 9th, 2011), but what's really interesting about this stock is its relatively high volume, coming to a 3-month average of 11.8 million shares—rather high for a firm with a total market capitalization around $535 million, which is still a small cap.
Clearwire is a provider of the remarkably esoteric 4G wireless broadband services. Their business model is to build and operate these lines to provide high-speed internet, cellular, and residential lines. While its miles away from giant competitors AT&T and Verizon, CLWR is trading in around the same as Sprint Nextel Corp. a staunch rival of CLWR.
Clearwire may have rather negative earnings per share, but 4G is still a fairly young product, so the sales could be under at the moment, but it does trade nicely with a great amount of volatility on the intraday and over the long-term, which means money making opportunities.
For example, on Friday, the stock reacted to the Bollinger Band jump and market news and proceeded to jump several cents in the early day before toppling off and slowly resurfacing throughout the day. But what has been keeping CLWRs stock prices at bargain prices is an apparent feud between Sprint and Clearwire that can only be said to be bombastic and extremely entertaining at times. Yet, despite the hysterics, both companies have suffered greatly as a result of this war of providers, cleaving a great portion of their market capitalizations and evidently their credit ratings as well.
Another possibility is an up-coming stock placement offering by Clearwire, which could partially inundate the market with its shares—at the low price of $2 per share. It only stands to reason that until the placement occurs, investors will not spur the stock into any large gains. But why does that matter? Play the price's up and downs and you can still make a profit! And it sure does have plenty of ups and downs.
Mind you, this is dangerous work, as its next to impossible to accurately predict the movements of any single stock, but generalizing trends and momentum trading have their advantages. In any case, this $1.96 billion, is primed for a buy-out, or so it would seem. Although it has an apparent current ratio of 1.80, the company is suffering through a horrible cash flow restrictions, and has so much of its assets tied up into long-term property plant and equipment, that this could spell disaster if it’s not able to meet any of its debt on time. But that's not to harken immediate peril, a quick acid test would reveal that there is currently plenty of cash on hand to handle current liabilities: the ratio amount to 2.58. But we can't say we support the idea of taking a long position on this stock in the long-term. As previously offered, CLWR is best chosen as an item of chance spurred by volatility and volume.
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