LightSquared is a wireless venture that seeks to create “convenient connectivity for all.” But, as the part-time Phil Falcone biographers among us know full well, it stands to do much more. In short, it will make or break backer Harbinger Capital. Success will mean billions for Falcone and his investors, who are more or less being held hostage until this whole thing pans out. Failure will mean Wilbur Falcone looking for a new benefactor on the 5:54 Metro North to Greenwich.
As one can expect when one is doing ground-breaking, visionary-esque work, LightSquared has encountered some opposition. The yachting community worries the interference will cause them to get lost at sea. The National Oceanic and Atmospheric Administration says it “may degrade precision services that track hurricanes, guide farmers and help build flood defenses.” Mars is similarly pissed. Last week brought news that LightSquared caused “interference to 75 percent of global-positioning system receivers examined in a U.S. government test,” though that won’t matter much if this thing runs out of cash, which it just might.
The upstart wireless company that is being bankrolled by Philip Falcone’s $5 billion Harbinger Capital Partners hedge fund could run out of money during the second quarter of 2012, according to the company’s financial statement. LightSquared, which registered a $427 million net loss during the first nine months of this year, may not be able to “continue as a going concern” unless it can raise additional capital and financing, the statement reviewed by Reuters said. “There is a need to raise substantial capital beyond the beginning of the second quarter of 2012 in order to have sufficient liquidity,” the company’s statement said.
Regardless of your feelings for Lightsquared, Phil, and Harbinger, remember that there are a lot of innocent bystanders involved here who stand to get hurt. Our favorite hedge fund wife of all time, Lisa Maria. Her outfits, who you cannot in good concscience deny have brought us all much joy. For-hire midgets. The city of New York. And most importantly, Wilbur, the Falcone family’s piano-playing pig, whose best years are behind him and who shouldn’t have to beg. What’s he supposed to do if Lightsquared–>Harbinger—>Phil go belly up, huh? So we ask, in the spirit of Christmas, and if you care about Wilbs at all, an Phil count on you for a few mill?
Exclusive: Falcone’s wireless company running out of cash [Reuters]