Shares of Clearwire Corp. fell as much as 31 percent on Friday as the CEO said the company was considering skipping a $237 million debt payment due on Dec. 1.
It is a very expensive payment that we have, Chief Executive Erik Prusch said to the Wall Street Journal on Friday. It would be a significant drain on our cash, so we have to evaluate everything in terms of our decision of where we're going.
We have a number of advisers advising us on all of our strategic options, Prusch continued.
Eventually, the stock price inched back up to close at $1.47, down 20.97 percent.
Clearwire has $698 million in cash and short-term investments as of Sept. 30, enough to fund the company for a year. However, the company is in need of $900 million to upgrade its wireless network with high-speed wireless technology known as LTE and keep its operations running.
The company is also looking to extend an agreement with its largest client, Sprint Nextel, to build the wireless network. Sprint is also the majority owner of the company, making analysts skeptical that Sprint would allow Clearwire to default on its payment.
The company would have a 30-day grace period if the company failed to make its debt payment.