Embattled Wimax operator Clearwire has announced plans to raise $1.1 billion through a debt sale.
But its Nasdaq stock fell 13.49% on the news, with analysts saying the move was not enough to cover its funding shortfall.
“It's only $1 billion, and in view of the other options this is likely one of the higher-cost of capital options,” Mizuho Securities analyst Michael Nelson toldReuters.
The US telco last month said it would cut 15% of its 4,200 staff, admitting it did not have enough funds to complete its national Wimax rollout.
It said at the time that it would consider asset sales, partnerships or fresh debt or equity issues from investors – which include Sprint, Google, Intel Capital, Comcast and Time Warner Cable.
But the news that it was not taking on more equity sparked a 6% rise in Sprint Nextel, which owns 54% of the company.
Clearwire, which has embarked on the world’s largest mobile Wimax rollout, posted a $139 million loss in the third quarter on revenue of $147 million.