Falcone really loves LightSquared

June 10, 2011

By Matthew Goldstein

Phil Falcone’s love for all things wireless and his upstart telecom company called LightSquared is well-known. Indeed, he’s gambled the future of his Harbinger Capital Partners hedge fund on LightSquared being a commercial success.

Earlier this week, we reported that Falcone was planning to deal with the high-level of redemptions at his hedge fund by giving withdrawing investors “shares” in LightSquared as an alternative to outright cash. Here’s Falcone telling investors why he is so bullish on bringing 4G high-speed wireless technology to the masses:

LightSquared’s success over the past year underscores my view of the inherent value of this asset to our investors. Moreover, the tangible progress LightSquared is making in its commercial and strategic relationships further reinforces my belief that LightSquared is an investment capable of generating enhanced returns over time. While we have had opportunities to monetize a portion of our LightSquared position in recent months, I feel strongly that any sale by our funds of an interest in LightSquared would have been premature and would not only have jeopardized the ability to join forces with a strategic partner, but also would have limited the substantial upside that I am convinced will come to all of our investors as our plan is executed.

Falcone’s confidence in LightSquared faces a big hurdle next week when the company is supposed to file a report with the Federal Communications Commission outling a plan for dealing with potential interference problems with Global Positioning Systems used by the aviation industry and other businesses. Critics contends that some of the broadcast spectrum in which LightSquared plans to operate could interfere with GPS technology.

So stay tuned.


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