Clearwire shares soared after the WiMAX service provider's IPO on Thursday, though later in the day they settled around their initial price.
The successful IPO, which raised about $600 million, may be a good sign for the emerging wireless broadband technology the company uses to provide Internet access to more than 200,000 U.S. customers.
The company, backed by Intel and Motorola, serves 35 U.S. metropolitan markets. WiMAX has a longer range than Wi-Fi and can deliver higher speeds depending on how bandwidth is allocated. Because it's based on standards, WiMAX could become a widely deployed technology that's inexpensive to build into portable devices. Sprint Nextel plans to use the technology as a complement to its cellular network beginning later this year.
Clearwire's underwriters sold 24 million shares at a price of $25 per share in the IPO. On Thursday, the stock opened at $27.25 per share, though later in the day it settled around the $25 level.
The Kirkland, Wash., company was founded in 2003 by mobile pioneer Craig McCaw, who started McCaw Cellular in the 1990s and later sold it to AT&T Wireless. Clearwire filed for an IPO last year but withdrew the filing in July after receiving $600 million in funding from Intel Capital. Motorola participated in the same round of funding, which totaled $900 million, and in the process acquired NextNet Wireless, Clearwire's hardware subsidiary.
Part of Clearwire's value comes from its spectrum licenses. Unlike Wi-Fi, WiMAX is expected in many cases to be deployed over licensed frequencies. Sprint Nextel holds about 85% of the licenses across the country for spectrum in a valuable band around 2.5GHz that can be used for WiMAX. The carrier, third-largest in the United States, has said it expects to reach as many as 100 million people with WiMAX by the end of next year.
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This story, "Clearwire IPO jumps up on opening" was originally published by IDG News Service .