What is LightSquared?
LightSquared is a company that plans to develop a wholesale 4G LTE wireless broadband communications network. 4G is the fourth generation of cellular wireless standards. Long Term Evolution (LTE) is a standard for wireless communication of high-speed data. From the LightSquared web site: "LightSquared will unleash the boundless opportunity of wireless broadband connectivity for all. We believe that it is time to transform the broadband industry to one that truly fosters innovation, creativity, and freedom of choice - with limitless and unimaginable possibilities." It continues, "Through its wholesale-only business model, those without their own wireless network or who have limited geographic coverage or spectrum can market and sell their own products using the LightSquared network." LightSquared, as of February, 2011, had about $1.75 billion in debt and equity. LightSquared is being promoted by Philip Falcone.
Who is Philip Falcone?
Philip Falcone is Senior Managing Director of the Harbinger Capital Partners Funds, a hedge fund. He has more than 20 years experience in leveraged finance and leveraged companies. Falcone was born in an iron-ore mining town in Minnesota. He attended Harvard, which led to a career on Wall Street, and to a successful hedge fund. He is a major Democrat donor. Falcone is a hedge fund investor who made a huge fortune shorting subprime debt.
Falcone is a controversial figure. He is losing a lot of his investors' money and investors are pulling out of his funds as quickly as they can. LightSquared is a do or die proposition for him. He needs it to work or he is finished. Falcone has poured billions of dollars into LightSquared, but it threatens to drag him down. He has acknowledged that investors have complained about gambling so much of Harbinger's money on a single, risky bet. For investors who want out, Harbinger is requiring investors to take some of their money in the form of an illiquid asset, a part of a LightSquared investment vehicle. As of May, 2011, LightSquared accounted for 62% of the fund's assets.
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Article comments
1 - Glenn Contrarian
And exactly how is this more scandalous than the billions that Big Oil gets in taxpayer subsidies every single year? Especially considering the fact that Big Oil has been making record profits for years? And that Republican lawmakers in Congress refuse to even consider cutting the subsidies to the largest single contributor to Republican lawmakers?
Your article smells like another Whitewater to me - everyone stay focused on the bright shiny strawman and ignore the 800-lb. crude-oil-covered gorilla in the room!
And don't get me started on Dubai-based Halliburton or Xe (nee Blackwater)....
2 - danapop
And I suppose all the billions in breaks that Comcast, AT&T, Verizon and others were given by the Bush FCC are all A-OK with you? Did you report on any of those? Have you even heard of the BrandX SCOTUS decision-where the Bush FCC filed a brief AGAINST the little guy and for Comcast? Bush and his Powell FCC are THE reason that the USA pays among the highest Internet prices in the world for mediocre and frequently capped service-but I'll be that YOU have never written a SINGLE WORD about this have you? Did you know that the Bush FCC classified the Internet as two completely different services depending on whether you got it from a phone or cable company-and both designations were designed to HELP big cable and telco keep their monopolies? I didn't think you did....
3 - Warren Beatty
Glenn Contrarian, before you use the word "subsidy" so freely, may I suggest that you look here.
danapop, did you bother to read the last line of my article? Regarding the "breaks that Comcast, AT&T, Verizon and others were given by the Bush FCC," can you be a bit more specific?