Straight Path Communications revealed that it is investigating the anonymous allegations regarding the statuses of some of its spectrum licenses, which were renewed by the Federal Communications Commission (FCC) in 2011 and 2012.
“Although we are conducting an investigation of the matter, we believe that the requirements related to such renewals, including the required showings of substantial service, were met,” according to Straight Path Communications in a regulatory filing with the Securities and Exchange Commission (SEC) ( H/T Activist Shorts).
The communications asset company expects to complete its investigation in several months.
Hedge fund managers go about finding investment ideas in a variety of different ways. Some target stocks with low multiples, while others look for growth names, and still others combine growth and value when looking for ideas. Some active fund managers use themes to look for ideas, and Owen Fitzpatrick of Aristotle Atlantic Partners is Read More
The stock price of Straight Path Communications declined more than 8% to $10.96 per share at the time of this writing around 1:01 in the afternoon in New York. The company lost more than 64% of stock value over the past month.
The huge decline was primarily caused by a report published by Kerrisdale Capital Management on October 29. The report indicated that Straight Path Communications is worth at least “90% less than its current market cap” due to several factors—shortcomings in spectrum, low demand contrasted with high supply and difficulties of practical mmWave deployments.
Straight Path preliminary investigation
According to Straight Path Communications, the FCC rules and regulations impose other requirements on certain licensees including a restriction on the discontinuation of operations.
The results of its preliminary investigation regarding the renewal allegations showed that a significant amount of the installed equipment in connection with the substantial service showings is missing at the original locations.
Straight Path Communications informed the FCC regarding the status of its investigation. The company also made an arrangement for the procurement and deployment of replacement equipment.
The communications asset company is preparing to deploy upgraded equipment for point-to-multipoint (PMP) applications at 39GHz in the latter part of 2016. It invested $1 million to expedite the production of PMP equipment for the 39 GHZ spectrum. Cambridge Broadband Networks is producing the PMP equipment.
“We cannot, at this time, give any assurance as to how the FCC may proceed in this matter. If the FCC were to disagree that we have complied with its rules, it may impose fines and/or additional reporting or operational requirements, revoke or condition our licenses, or take other action,” said Straight Path Communications.
Appeals Court reverses PTAB administrative decision
Straight Path Communications also disclosed that the United States Court of Appeals reversed the administrative decision of the U.S. Patent and Trade Mark Office Trial and Appeal Board (PTAB) that claims 1-7 and 32-42 of the U.S. Patent 6,108,704 (‘704 Patent) are unpatentable.
The Court of Appeals also reversed PTAB’s cancelation of all challenged claims of the ‘704 Patent. It also rejected PTAB’s claim construction of a key claim term and returned the case to PTAB for further proceedings under correct construction.
Sipnet EU S.R.O filed a petition for an inter partes review (IPR) of the ‘704 Patent with the PTAB on April 11, 2013.