Time Warner Cable and Intel announced Wednesday that they were writing down the value of their investments in the “WiMax” wireless broadband company to reflect the 66 percent drop in the company’s stock price since May. Time Warner Cable wrote down $350 million of its $550 million investment, while Intel wrote down $950 million of its $1 billion investment.
Other investors are expected to follow suit. Comcast is expected to write down the value of its $1.05 billion investment in Clearwire when it announces its fourth quarter earnings in February, according to Bloomberg News, citing people familiar with the situation.
The other investors in the WiMax venture have yet to announce write-downs. They include Google, which invested $500 million; Bright House, a cable provider, which invested $100 million, and Trilogy Equity Partners, a private investment group with wireless industry expertise, which invested $10 million.
A Time Warner Cable spokesman told DealBook that the write-down was mostly for accounting purposes and in “no way diminishes” its confidence in Clearwire.
Clearwire has just begun rolling out its WiMax Internet service. It is currently available in just two cities: Baltimore and Portland, Ore. The company plans on bringing its service to the rest of the country in the next few years.
Sprint Nextel is the lead investor in the project and is counting on it to revive its sagging brand. Sprint owns 51 percent of the joint venture, while Clearwire, which already operated “pre-WiMax” Internet service to 46 locations, owns 27 percent. The remaining 22 percent is owned by the other six partners.