The share of WiMAX equipment maker Alvarion Ltd. (Nasdaq: ALVR; TASE: ALVR) has risen 29% to $8.73 on Nasdaq since the company published its financial report for the first quarter a week ago. Trading volume has been above average. The company's market cap has climbed by $123 million to $550 million.
Reasons for the share's climb include the fact that the company beat analysts' consensus, the upbeat tone in the conference call with management, and new developments is the Sprint Nextel Corp. (NYSE:S)-Clearwire Corporation (Nasdaq: CLWR) saga.
Two days after Alvarion published its financials, Sprint, the third largest cellular operator in the US, announced that it planned to merge Clearwire's WiMAX business to create a new mobile broadband company. Intel Corporation (Nasdaq: INTC), Google Inc. (Nasdaq: GOOG), Comcast Corporation (Nasdaq: CMSCA), Time Warner Inc. (NYSE: TWX), and Canada's Brighthouse Inc. will invest $3.2 billion in the venture, which will expedite the deployment of a nationwide WiMAX network in the US.
RBC Capital Markets analyst Daniel Meron says that the joint Sprint-Clearwire WiMAX venture will boost demand for wireless broadband. He notes the vote of confidence in WiMAX by the telecommunications industry giants, and predicts that the venture will boost investor sentiment towards both Alvarion and wireless backhaul solutions provider Ceragon Networks Ltd. (Nasdaq: CRNT; TASE:CRNT).
Alvarion has no direct affiliation with Sprint's WiMAX project, but Meron believes that Alvarion will benefit from the improvement in the WiMAX climate and rising demand for equipment.
Published by Globes [online], Israel business news - www.globes-online.com - on May 11, 2008
© Copyright of Globes Publisher Itonut (1983) Ltd. 2008