Globalstar could be the next Herbalife-like hedge fund battle.
A small hedge fund manager—$300 million Kerrisdale Capital—is trying for a Bill Ackman-style takedown of the satellite communications company, saying its stock is worth zero because the wireless spectrum it is vying to use is overvalued and its other revenues are small compared with its debt.
"Globalstar's equity is worthless," Kerrisdale founder Sahm Adrangi said in a report released Monday in conjunction with a live presentation midday in New York. "In virtually all scenarios, the combined value of the company's unprofitable core satellite business and the potential terrestrial applications of its spectrum assets falls below its massive debt burden, making the stock a zero."
That highly negative thesis puts Adrangi at odds with plenty of established hedge funds.
Among the company's largest shareholders are $21.6 billion York Capital Management, $3.4 billion Litespeed Management, $2.8 billion Hudson Bay Capital Management and $2.2 billion Ionic Capital Management, according to public filings as of June 30. All firm asset figures are as of July 1, according to the Absolute Return Billion Dollar Club. Other brand-name owners are BlackRock Fund Advisors, D.E. Shaw & Co. and Soros Funds Management.