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Icahn, Tepper and Beal Bet on LightSquared’s Collapse

ICAHN CAPITAL LP“Billionaire Carl Icahn has purchased debt from Philip Falcone’s LightSquared Inc.’s bondholders as the satellite-broadband-service provider struggles to start service,” reports Bloomberg. “Icahn, along with investors Andrew Beal and David Tepper purchased $300 million in LightSquared debt sold by Farallon Capital Management LLC. last month.”

“Icahn has been quietly buying up debt of Mr. Falcone’s wireless-network company LightSquared… swooping in after the debt plunged in value late last year amid regulatory delays,” writes the Wall Street Journal. “The move could enable Mr. Icahn to have a say in the running of the troubled company, putting him on a collision course with Mr. Falcone.” According to Bloomberg, “the move may give Icahn control of LightSquared’s radio spectrum for less than Falcone originally paid.” When asked about Icahn’s investment by the Wall Street Journal via email, Falcone reportedly said. “Carl is certainly entitled to his opinion, as I am entitled to disagree with it.” Icahn, Beal and Tepper have considerable experience in distressed investing – Icahn himself is considered one of the most experienced and successful players in the distressed investing game.

The involvement of these three money managers is only the latest thorn in the side of Phil Falcone and his Harbinger Capital, which has, to-date, invested $2.9 billion in LightSquared. Harbinger owns all but a small sliver of LightSquared, the wireless venture that has the technology to use GPS systems to provide nationwide 4G but has yet to gain federal approval. There are those on Capitol Hill that recommend strongly against LightSquared, saying that its technology significantly interferes with the nation’s GPS systems, posing a threat to security. LightSquared called the tests “rigged” and “biased,” but, until the FCC rules, it is at a stalemate nonetheless.

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