Mobile satellite firm Globalstar is taking an activist investor to task for claiming that the company's wireless spectrum is worthless. Kerrisdale Capital, a short-seller that would benefit from a drop in the company's stock price, said earlier this week that Globalstar's spectrum, which is in the upper 2.4 GHz band, is not valuable because there is already a glut of Wi-Fi spectrum in the United States.
In addition, Kerrisdale said that Globalstar's spectrum is not the most appealing spectrum available because other, more desirable spectrum options exist for Wi-Fi coverage.
Globalstar CEO Jay Monroe called Kerrisdale Capital's report flawed and said it was based on mischaracterizations. In addition, Monroe told investors yesterday on a conference call that Globalstar's spectrum could definitely be used to ease congestion problems that currently exist with Wi-Fi networks in the United States.
Globalstar is awaiting a decision by the FCC regarding a request it made to have the FCC alter its existing rules and allow the company to offer mobile broadband service over the spectrum it has in the upper 2.4 GHz band. The company has proposed to offer a terrestrial low power service (TLPS) that makes use of that 2.4 GHz band as well as the adjacent unlicensed industrial, scientific and medical (ISM) spectrum at 2473-2483.5 MHz.
Nevertheless, Kerrisdale's report had a negative impact on Globalstar stock, which fell as much as 34 percent earlier this month but rallied 15 percent as investors debated the validity of the investor's claims.
For more:
- see this Bloomberg article and this article
- see this NY Times article
- see this press release
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