Exclusive: Falcone's wireless company running out of cash (OBAMA crony capitalist alert)

al reuters ^ | 12/19/2011 | Matthew Goldstein

[milwguy]

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.

It's been no secret in the telecom world that LightSquared is in need of cash, but the financial statement paints a fairly bleak outlook for the Reston, Virginia-based company. A failure of LightSquared would be another jolt to investors in Falcone's hedge fund, which has committed more than $3 billion in equity and loan commitments to the company. Falcone gained fame after making billions in 2007 by shorting subprime mortgages.

A spokesman for LightSquared said the company "has cash through the next several quarters." A person familiar with LightSquared said the company does not need any additional money until the Federal Communication Commission rules on a company plan for dealing with potential interference issues with global positioning systems. It is not clear when the FCC will rule.

A Harbinger's spokesman was not immediately available for comment.

In July, Falcone's hedge fund loaned about $184 million to LightSquared in return for warrants that can be converted into 2.9 million shares of LightSquared stock, according to the financial

[milwguy]

Another one of Barry's buddies going broke unless he can get the gov't to bail him out. Mr. Falcone is already under investigation by the SEC for 'loaning' himself $100 million of his clients money, and now it appears his fraudulent LightSquared company may be going bust too.

Falcone still could be rescued by Barry and his cronies at the FCC though. If the FCC grants LightSquared the license they seek, money will pour into the company and they will make a killing.

The problem with granting LightSquared a license is the bandwidth THEY intend to use will render your GPS devices like Garmin and cellphones unusable. Small price to pay for making Barry's crony capitalists rich.

[GeronL]

More cronyism.

Not a surprise.

[E. Pluribus Unum]

I smell a BAILOUT!

[jazusamo]

There’s been an awful lot of sunlight on this scam, I doubt The Won wants to save his buddy with the election coming up.

[bigbob]

Lightsquared’s balance sheet is anchored by “assets” that are nothing more than the improperly issued licenses to operate in spectrum that is guaranteed to raise havoc with GPS devices large and small. And who was stupid enough to grant such licenses? The corrupt FCC of the Obama Adminstration, that’s who.

[milwguy]

The ‘assets’ they list on their balance sheets worth ‘billions’ are actually licenses they bought from cab companies for frequency bands that the cabbies used but didn’t need any more. They paid millions for the licenses, and now say they are worth billions. They are in actuality worth 0 if the FCC does the right thing and shuts down the fraud.

[Hoodat]

Institutionalized corruption.

[mewzilla]

From September, by Michelle Malkin.......

LightSquared: The next Obama pay-for-play morass?

[SunkenCiv]

Thanks milwguy.