Kerrisdale Capital to Host Live Presentation and Webcast on Globalstar, Inc.

NEW YORK, Oct. 6, 2014 /PRNewswire/ -- Kerrisdale Capital ("Kerrisdale"), a New York based private investment manager, announced today that it will host a live presentation on mobile satellite services provider, Globalstar, Inc. (NYSE: GSAT). Sahm Adrangi, Chief Investment Officer, will debunk Globalstar's highly misleading claims about its business and discuss why Kerrisdale believes that Globalstar's equity value is worthless, in contrast to the Company's current $4 billion dollar market capitalization.

The live presentation will begin at 11:30am ET at AXA Event & Production Center at 787 Seventh Avenue, New York. Please arrive 15 minutes in advance to sign in. Registration for the live webcast of the presentation can also be accessed at kerr.co/10614. The full research report and presentation materials are available at factsaboutglobalstar.com.

"Globalstar is the most egregious stock promotion we have come across since Sino-Forest," says Sahm Adrangi, Chief Investment Officer of Kerrisdale Capital. "Globalstar's proposed paid Wi-Fi offering is nothing more than the company's latest gimmick to stave off bankruptcy, a stunt that rivals Allen Chan's fake forests as the most successful stock-market fantasy we've ever come across."

Kerrisdale believes the company is currently valued at $4 billion due to misleading and ill-informed publicity over the company's spectrum holdings and a proposed licensable Wi-Fi channel currently under review by the Federal Communications Commission. This licensable Wi-Fi channel will never be commercially viable, and its spectrum is unusable terrestrially in all other use cases. The combined value of the company's unprofitable core satellite business and potential terrestrial applications of its spectrum assets is lower than its debt burden, making the stock a zero.

Terrestrial Low Power Service is Not Commercially Viable

Globalstar's proposed Terrestrial Low Power Service ("TLPS") will never be commercially viable, based on Kerrisdale's in-depth research and discussions with numerous industry experts. In a world that already has three free, unlicensed channels in the 2.4GHz band and an additional 22 in the 5GHz band, one more channel, hypothetically accessible to only a circumscribed set of users, will never be worth many billions of dollars.

Wi-Fi "Congestion" is Highly Manageable

The Wi-Fi "congestion" that Globalstar purports to address is typically misdiagnosed and is a problem that IT professionals routinely solve every day by using best practices and modern technology. Kerrisdale's comprehensive report shows that network administrators have more than enough channels at their disposal to address co-channel interference, which would deem Globalstar's Wi-Fi offering irrelevant.

Heavy Debt Burden and an Unprofitable Core Business

Globalstar's mobile satellite services business has more than $500 million of outstanding net debt, and over the twelve months ended June 30, 2014, generated just $15 million of adjusted EBITDA and negative $95 million of operating income. Since emerging from bankruptcy in 2004, it has racked up cumulative operating losses of $460 million, increased its share count by a factor of 13, been de-listed from NASDAQ in 2012, defaulted on its debt in 2013, and is likely to violate its financial covenants again in the near future.

Kerrisdale's research report and presentation also discuss the public's increased usage of 5GHz Wi-Fi spectrum as compared to Globalstar's 2.4GHz Wi-Fi spectrum, consumers' relatively low appetite to pay for Wi-Fi and a discussion of how Globalstar's spectrum should be valued in a non-Wi-Fi use case.

Kerrisdale Capital holds short positions in Globalstar, Inc.

About Kerrisdale Capital

Kerrisdale Capital Management, LLC is a fundamentally-oriented investment manager that focuses on long-term value investments and event-driven special situations. Kerrisdale has $300 million in assets under management and is based out of New York City.

Contact

Agnes Cao
Kerrisdale Capital, LLC
[email protected] 
212-257-4385

SOURCE Kerrisdale Capital Management, LLC