When Kerrisdale Capital first released its short thesis this morning, the characteristic plunge that we’re used to seeing from high profile shorts didn’t materialize, at least not at first. But when Kerrisdale CIO Sahm Adrangi began his presentation this morning the price fell by double digits very quickly, reaching -15% before bouncing back to -11% as opportunistic investors started going long to squeeze a crowded position and bulls built up their position even more.
TLPS is an end run around traditional gatekeepers: Odeon Capital
“Kerrisdale’s thesis reveals a material misunderstanding of what the TLPS opportunity is all about – their basic argument is the wifi of today works- is free (misconstrued) and there’s plenty available– so why would there be any value to Globalstar’s spectrum,” wrote Jason Bernstein for Odeon Capital Group in an email, standing by his Buy rating and $5 price target for Globalstar, Inc. (NYSEMKT:GSAT). “The answer is gatekeepers. Today, carriers and cable companies provide access, you need them to use wifi. Ultimately, TLPS provides an end run around the traditional gatekeepers, and we think that’s a very compelling incentive.”
Bernstein doesn’t completely dismiss the presentation, acknowledging that Globalstar, Inc. (NYSEMKT:GSAT) has a rough operating history and that some of the technical issues Kerrisdale raises are worth discussing, but ultimately he says that there is nothing that makes him change his opinion about the value of GSAT’s spectrum or the company’s prospects in general.
Odey Discusses Howard Marks’ Astute Observation On Why Hedge Fund Alpha Is Increasingly Rare [January Letter]
According to a copy of the firm's January investor update which ValueWalk has been able to review, the Odey Asset Management Odey Special Situations Fund returned 7.7% in January, outperforming its benchmark, the MSCI World USD Index, by 8.7%. Q4 2020 hedge fund letters, conferences and more The $60 million fund, which Adrian Courtenay manages, Read More
Maglan Capital says its increasing its position on Globalstar
When Maglan Capital explained its reason for going long Globalstar, Inc. (NYSEMKT:GSAT) earlier this year it used similar reasoning, arguing that GSAT should approach Apple Inc. (NASDAQ:AAPL), Netflix, Inc. (NASDAQ:NFLX), Amazon.com, Inc. (NASDAQ:AMZN) and other tech companies that would want to offer customers free internet access to differentiate their products in the market, even if that meant paying for access up front.
“Imagine if Apple could offer its customers a ubiquitous, free, worldwide WiFi, with an unrivaled level of speed and clarity. How much more would customers be willing to pay for an Apple device?” Maglan wrote in a May letter. Maglan tweeted during the presentation that it’s buying more Globalstar, Inc. (NYSEMKT:GSAT), so it hasn’t been impressed by the presentation either.
You could ask the same for any handset manufacturer, content provider (Netflix streaming wherever you are, for example), assuming that the tech works how Globalstar, Inc. (NYSEMKT:GSAT) longs say it does.