Harbinger Capital Partners, the private-equity firm behind LTE startup LightSquared, has dropped Clearwire (NASDAQ:CLWR) from its stock portfolio and cut its stock holdings in Sprint Nextel (NYSE:S), according to a regulatory filing.
The hedge fund's manager, Phil Falcone, cut holdings in a range of stocks, including Sprint, Citigroup and others. Harbinger cut the number of Sprint shares it holds from around 50 million in the first quarter to 35 million, the filings show. The disclosures come from Harbinger's 13-F filing with the Securities and Exchange Commission. Due to SEC rules, however, much of Harbinger's more than $2 billion investment in LightSquared is not reflected in the filing.
LightSquared, which is majority owned by Harbinger, has said its wholesale LTE network will allow for terrestrial-only, satellite-only or integrated satellite-terrestrial services (via the terrestrial and MSS spectrum Harbinger scored through a merger in March with satellite operator SkyTerra). LightSquared is planning initial LTE trials in Baltimore, Denver, Las Vegas and Phoenix, with the network set to launch before third quarter of 2011.
Harbinger recently used stock as collateral to help secure a $400 million loan from UBS for LightSquared. LightSquared is in the midst of getting an additional $1.75 billion in debt and equity financing for its network; total network launch costs could run as high as $6 billion.
It has been a busy few days for Harbinger. TerreStar, which is in the midst of launching an all-IP, integrated satellite-terrestrial network, is working with advisors from Blackstone Group to try to avoid filing for bankruptcy, according to a Reuters report. The report said that the firm is working with its major creditors, including Harbinger. Harbinger owns $150 million of TerreStar's debt, which is estimated to total nearly $1 billion. Representatives from TerreStar and Harbinger declined to comment.
- see this Reuters article
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Correction, Aug. 17, 2010: This article originally stated incorrectly that Harbinger cut both Clearwire and Sprint Nextel from its stock portfolio. Harbinger has cut Clearwire entirely and has reduced the number of shares it holds in Sprint.