Tuesday, February 28, 2012

LightSquared, one week later

Last week, I discussed the company LightSquared, it's primary financial backer Harbinger Capital, and the apparent collusion with the Obama administration. All of this was insufficient to overcome a major problem with LightSquared's business plan: it's satellite network interferes with GPS signals.

Later on the same day--last Tuesday--LightSquared announced that it will be cutting it's workforce by nearly 50%. But true to form, Harbinger owner Philip Falcone insisted that that company is not shutting down:
LightSquared reportedly told Reuters Tuesday that it plans to lay off 45 percent of its workforce in a "prudent and necessary cost savings measure to ensure the long-term success of the company." 
Philip Falcone, the hedge fund manager who is behind the company, has insisted that LightSquared won't shut down despite a series of disastrous developments. Reuters cited an unnamed source as saying LightSquared "is not considering bankruptcy."
Today, Harbinger and LightSquared investors--many of whom are suing Falcone and Harbinger--got some more "good" news. Lightsquared's CEO is stepping down. Sanjiv Ahuja, brought in as CEO by Falcone when SkyTerra first became LightSquared, was involved in some of those White House meetings prior to the formation of LightSquared and prior Mr. Ahuja actually being named CEO, as detailed by The Daily Caller.

But fear not for Mr. Ahuja. He will--for the moment--remain involved with LightSquared:
Ahuja will remain as chairman of the board and Philip Falcone, the billionaire hedge fund manager who has invested millions in building out a LightSquared LTE wireless network, was also appointed to the board, the company said in a statement.
Board positions are interesting things; inaccessible to the vast majority of people, they can be quite lucrative and often involve little or no work, with the added benefit of providing protection from various potential legal entanglements. So what we have here is some cover for both Ahuja and Falcone, plus access to some further cash payouts even as LightSquared is wound down and potentially shut down in the near future.

To be fair, Falcone has lost a ridiculous amount of money in this LightSquared venture. And with the pending lawsuits filed against him and his company, he probably needs every last cent he can get his hands on.

Where will LightSquared be in another week? Only the Shadow knows...

Cheers, all.

2 comments:

  1. Who knows what evil lurks in the hearts of men?

    Well, when he sets his mind to it, there is always Hal Jordan too, isn't there?

    ReplyDelete