Clearwire value will jump as Lightsquared future dims
The one thing Philip Falcone doesn't have is time. Investors of his faltering hedge fund "Harbinger" are pulling money out as fast as they can. The guy is over a billion in debt (with debt growing) and his hedge fund has dropped something like 60% in value over the last year or two. Falcone is also facing impossible deadlines extablished by the FCC to be fully operational late next year. Plus most politicians on the hill are strongly against allowing LS to operate (in its current state) now or in the future.
Going forward only two things can happen regarding Lightsquared's future.
1. Lightsquared shuts down or files for bankruptcy due to GPS interference issues and lack of adequate funding.
2. Lightsquared delays its wireless LTE venture for a couple years until everyone can figure a way LS and the GPS insdustry, DOD, Dept of Agriculture, FAA, Police, Fire Departments, etc. to live in harmony.
Odds of opton (1) happening are 85% while option (2) 15%. Sure there is value in LS spectrum holding, but at substantially reduced costs for reasons stated above.
If you don't belive me, pleae read the following.
Tests Confirm LightSquared's GPS Interference, Group Contends
Now the question is can Falcone salvage any parts of his broken company? Don't know but with reports like this the game is over. Lightsquared was a rush to judgement and should of never been fast tracked by the FCC. The real losers are Harbinger investors - they are really going to take a huge bath.
"The test data discussed today makes clear that there is substantial interference to GPS if LightSquared turns on high-powered terrestrial facilities in the spectrum next door to GPS," said James Kirkland, a VP of Trimble Navigation and founding member of the Coalition to Save Our GPS.
The group consists of companies in the aviation, agriculture, transportation, construction, engineering, and surveying industries as well as suppliers of GPS-based equipment and services.
Garmin, a maker of commercial GPS equipment and portable navigation devices (PNDs), previously conducted its own limited tests and has contended that the network will interfere with consumer, commercial, and public-safety GPS equipment.
During a meeting here sponsored by the federal government's GPS advisory board, Kirkland said the testing data "confirm what the industry told the FCC" and also "confirms that there is no viable technical fix." The FCC should stop "trying to find a solution to an unfixable problem" and should "focus its efforts on finding spectrum that LightSquared can operate in - where LightSquared won't interfere with GPS."