Sprint Nextel Corporation (S), DISH Network Corp (DISH): Charlie Ergen’s War

Regardless of who grabs the rest of Clearwire, Clearwire appears to be in position to win regardless of what happens. Clearwire Corporation (NASDAQ:CLWR) needs money, badly, to the tune of $1.7 billion to keep going. Long term debt jumped to $4.27 billion from $4.02 billion the year before, and net income went $11 million deeper in the red to $728.6 million. However, Dish’s inclusion into the bidding wars should shore up investor confidence in Clearwire because it demonstrates that regardless of the company’s poor balance sheet, the firm has a valuable service that will benefit either company in the long run.

Now, some analysts believe Clearwire’s real valuation should be closer to $5/share, which is what higher-ups in the company want. DISH Network Corp (NASDAQ:DISH) has come the closest to meeting that target, and Sprint Nextel Corporation (NYSE:S) may have to come even closer to stay in the game. Either way, Clearwire appears to be able to get what they want from either Sprint or Dish, and that has to be good news for the company that needs money, soon.

Clearwire, for me, appears to be the better investment opportunity at this point. Adding a new suitor can only make the share-holders happy that the company has a future, and that it is worth as much as the owners believe it to be worth. As for DISH Network Corp (NASDAQ:DISH) and Sprint, it will be fun to watch these two go at it as this war unfolds, although Dish’s late entry has upped the ante significantly and puts Sprint in a difficult position going forward. Softbank’s partnership with Sprint will be tested because of this, and while that’s happening, Dish’s offer looks all the better.

Charlie Ergen has caused the chaos he wanted, and all of a sudden, a sure thing has become an interesting story once again.

John McKenna has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. John is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

The article Charlie Ergen’s War originally appeared on Fool.com and is written by John McKenna.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.