LightSquared Running Out Of Cash

Dec 20 2011 | 1:29pm ET

Despite billions in financing from Harbinger Capital Partners, wireless internet venture LightSquared is on the verge of running out of money.

Financial statements reviewed by Reuters show that the Reston, Va.-based company may not be able to "continue as a going concern" beyond the second quarter of next year without additional capital. "There is a need to raise substantial capital beyond the beginning of the second quarter of 2012 in order to have sufficient liquidity," the statement said.

LightSquared took a $427 million net loss during the first three quarters of 2011. But recent weeks have seen the company suffer a series of setbacks, including tests showing that its system interferes with 75% of global positioning system devices and a Securities and Exchange Commission probe into its biggest backer, Harbinger founder Philip Falcone.

Harbinger has provided more than $3 billion in investments and loans to LightSquared, out of its $5 billion in assets under management.

Despite the bleak tone of the statement and the note about needing additional capital, a LightSquared spokesman told Reuters that it "has cash through the next several quarters" and will not need to raise more money until the Federal Communications Commission approves its plan to counter GPS interference.

The statement does show that LightSquared has $4.64 billion in assets, including $2.44 billion in licenses, and "significant cash commitments" from customers. But it still warns that "if the company fails to obtain the necessary financing on a timely basis, the execution of the company's business strategy could be materially delayed, costs could materially increase or the company may have to discontinue operations or seek a purchaser for the business or assets."


In Depth

Hedge Fund Veteran Peter Borish Talks Trading

Dec 17 2014 | 9:32am ET

Peter Borish says 2014 was “tricky” from a trading perspective. “The best...

Lifestyle

Cohen Donates $1.5M To GOP Governors Association

Dec 10 2014 | 7:13am ET

The Republican Governors Association raised close to $25 million from October 1...

Guest Contributor

Q&A With Daniel Gallancy: Institutional Interest In Bitcoin Is Growing Steadily

Dec 12 2014 | 7:54am ET

Daniel Gallancy is founder and CEO of SolidX, a provider of total return swaps for...

 

Sponsored Content

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

December 2014 Cover

Futures 2014 person of the year

Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.