An IPO at LightSquared?

April 13th, 2011 by · Leave a Comment

There’s never a dull week in in the world of LightSquared, the yet-to-be-built independent wholesale LTE network backed by Philip Falcone and his Harbinger Capital Partners hedge fund.  What with its funding always under scrutiny, high profile partners either signing up eagerly or being acquired by AT&T, few actual facilities let alone revenue, and GPS providers screaming about potential interference, it seems obvious what the company should do next.  Go public!

Yep, that’s what the company has planned according to a Reuters report earlier this week, though of course LightSquared itself isn’t talking.  The idea is obvious enough – Harbinger probably can’t commit any more capital to the project following the reputed $3B they have put in thus far.  They haven’t attracted enough other private funding, but the public markets might have a few dollars to spare on a speculative wireless buildout that is barely getting started but which will challenge the status quo.  Right?  I mean dollars that aren’t already invested in Clearwire.

Actually, while I’m certain the company has explored and will continue to explore every such option, I’ll be very surprised if an IPO makes it to the market any time soon.  I don’t think they’ll like the pricing they would get.  Unless of course next week’s news turns everything on its head again, which of course could happen.

Isn’t there some way that Clearwire and LightSquared can throw their hats in the same ring?  LightSquared could offer the satellite rural coverage to complement Clearwire’s metro areas, and Clearwire could commit to transitioning to the next generation of LTE or some sort of hybrid in a few years – which is how long it would take LightSquared to build out its network anyway.  Then all the funding is in place, and we’re halfway to having one big wholesale wireless player with Sprint as anchor tenant and the rest of the small guys on board – all ready to compete head to head with Verizon and AT&T.  Easy to slap together with words, but apparently rather difficult on the ground.  Sigh…

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Categories: Financials · Wireless

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