New Clearwire CEO Faces Tough Road as Wireless Provider Looks for Cash
Clearwire has named Erik Prusch its new president and CEO, replacing interim chief John Stanton as the Kirkland, WA-based wireless broadband provider struggles with Wall Street doubts about its future. Prusch joined Clearwire (NASDAQ: CLWR) in 2009 as chief financial officer, and as the press release notes, helped the company raise more than $6 billion in equity and debt financing.
Prusch will need to call on those skills again if Clearwire hopes to make it through the current rough seas. Following its recent quarterly report, Clearwire said it could need to raise almost $1 billion to pay for its network—up to $300 million to finish work on its WiMax network, and another $600 million to add the Long-Term Evolution, or LTE, technology that is becoming standard in the industry.
Although few stocks escaped unbloodied by the recent turmoil on Wall Street, Clearwire is in a particularly precarious position. Yesterday, as noted in this report by Forbes’ Eric Savitz, a Bank of America/Merrill Lynch analyst cut his rating on Clearwire, citing “increased going concern risk,” and targeted the stock price at 50 cents, about a third of where it was trading.
Prusch was elevated to chief operating officer in March, when former CEO Bill Morrow and two other top officers left. That was just a few months after Clearwire founder and wireless industry legend Craig McCaw left the company as chairman. Stanton, another of Washington state’s wireless industry pioneers, took over the interim CEO duties in March. He’ll stay involved as executive chairman, the company said.