NextWave Wireless said its cash is running out, sending the company's shares down to a 52-week low on Friday. The company, which saw its shares fall as low as 89 cents per share on Friday, said it had $71.1 million in cash, cash equivalents, marketable securities, and restricted cash at the end of the second quarter, and unless it raises more money, the company will run out of cash at the beginning of October.
According to Chairman and Chief Executive Allen Salmasi, NextWave is negotiating for financing that will give the company enough money to operate through June 2009. The financing could include a $100 million private placement of junior preferred stock as well as up to $100 million in debt financing.
NextWave, which has its hands in a number of businesses including WiMAX chips and broadband wireless equipment, says its troubles come from worldwide economic conditions, which has resulted in a decline in bookings and sales of its network equipment. In addition, its plans to sell its U.S. spectrum holdings have been delayed by market conditions and regulatory issues, the company said. In July, NextWave reached a deal to sell AWS spectrum for $150.1 million to T-Mobile, Atlantic Wireless, Alaska Wireless and MetroPCS. The proceeds are supposed to go into a restricted cash account and to redeem debt.
NextWave reported second-quarter revenues of $31.8 million, a $5.8-million or 22-percent increase over the first quarter 2008. NextWave said the increase was driven by increased sales of NextWave's wireless broadband network equipment and subscriber devices and by the continued growth in mobile device software revenues generated by its PacketVideo subsidiary. The company reported a loss of $65.7 million for the second quarter, a decrease of $13.9 million or 17 percent from the first quarter.
"We are feeling the effects of a slowing global economy on our business. This has resulted in lower than anticipated sales of our 3GPP and WiFi based network products and a delay in WiMAX network deployments that will continue to impact projected sales of our WiMAX semiconductor products," Salmasi said in a press release.
For more:
- read AP
- see this release
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