Clearwire: Burning Cash by the Billions

Clearwire Corporation (CLWR) failed to encourage investors during
its first quarter earnings release last week. The company posted
revenue growth of 76% and subscriber growth of 443,000. However, the
net loss figures continued to widen to $1.08 per share for the first
quarter alone.

Management made a valiant effort at putting a positive
spin on the numbers. There were three additional markets which turned
EBITDA positive during the quarter bringing the profitable total to
27. The bottom line is that now nearly 60% of domestic markets are
EBITDA positive. Despite this “exciting” news, the financial burden of
rolling out new technology will continue to weigh on the company for
several years. At the same time, management noted that the cost per
gross addition was higher over the last quarter as promotion efforts
are not cheap.