Harbinger Capital-backed LightSquared ponders IPO

March 13th, 2011
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Phil Falcone made a risky bet when he invested half of Harbinger Capital's $6 billion of capital into LightSquared, a startup telecom company. LightSquared borrowed $1 billion and still needs an additional $6 billion to proceed with its plan to establish a nationwide high speed wireless network by 2015. According to Reuters, LightSquared could file for an IPO as early as this summer. An IPO would allow Falcone’s Harbinger Capital to pay off its investors with equity stakes in LightSqaured. However, many analysts expect LightSquared to have difficulties going public, unless it establishes a significant contract that strengthens its credibility.

Falcone’s clients became increasingly concerned when Harbinger Capital’s hedge funds declined by 12 percent in 2010 and by an additional 4 percent in the first-quarter of 2011. Nonetheless, analysts view LightSquared as a good low-cost alternative to big telecom companies such as Verizon (NYSE:VZ). Notably, Best Buy (NYSE:BBY) and Leap Wireless International (NASDAQ:LEAP) both recently agreed to purchase LighSquared’s service.
For Detailed Investor Profiles on these Investors, click below:
HRG Group (Harbinger Capital Partners)
Related People: Omar Asali (CEO); Peter Jenson (COO); Philip Falcone*
Related Entities: Harbert Management Corporation*; Harbinger Capital Credit Distressed BlueLine Fund; Harbinger Capital Partners Master Fund; Harbinger Capital Partners Special Situations Fund LP; HRG Capital
Related Article Tags: Multi-Strategy, Long Short, Equity, Debt and Global Macro Hedge Fund News

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