Unfortunately, the Company finds itself with insufficient capital to build out its facilities to realize the full value of the spectrum capacity that it holds. Like you, Crest would expect that, if the members of the Company's Board were intent on discharging their fiduciary duties, they would take immediate action to bolster the Company's liquidity.
In addition to the sale of excess spectrum that you proposed in your letter, Crest believes that immediate steps to raise capital through the offering and sale of additional common shares would be among the steps a board of directors, acting in the best interests of all shareholders, would pursue. Proceeds from such an offering, together with proceeds from the sale of a portion of the Company's excess spectrum to a third party or parties, would ensure a successful build-out of the Company's network and bolster the Company's position as it renegotiates the lease of its spectrum to Sprint. And the additional and immediate network investment facilitated by a successful share offering would likely increase the value of Clearwire's assets and thus the sale price for any excess spectrum.
It is Crest's view that this sale of additional shares can be done quickly and successfully for the good of the Company, its shareholders and the public at large. Indeed, Crest would consider participating in such an offering.
There are a number of reasons why a public offering and sale of shares, in addition to the sale of its excess spectrum, should be pursued. First, the value of the Company's assets, which the Softbank-Sprint proposal and the Company's own disclosures confirm, would easily support such an offering. Second, the proceeds from the sale of shares would provide the Company with the capital necessary to push ahead with its build-out strategy during the period it is working to complete its sale of excess spectrum. Third, raising capital from investors other than the dominant shareholder, or at least pro rata with it, would prevent what has amounted to a creeping tender offer that Sprint has said is its intention with regard to the Company – to wit, the buying of shares of strategic investors whenever it gets a chance. Finally, the Company has recently experienced success in raising capital, specifically through sales of its common shares to the public utilizing its Sales Agreement with Cantor Fitzgerald & Company. There is no reason why these efforts should not continue. Indeed, it is unclear why the Company abruptly ended that arrangement near the end of July notwithstanding the success CF&Co. experienced in selling the Company's common shares under that arrangement.