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Straight Path Soars 35% Higher On FCC Settlement

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Straight Path Soars 35% Higher On FCC Settlement

Shares of Straight Path Communications Inc (NYSE: STRP) soared higher by more than 60 percent Thursday morning after the company announced it reached a settlement with the U.S. Federal Communications Commission.

Straight Path Communications, one of the largest holders of flexible mobile and fixed-use wireless millimeter wave spectrum, said it will pay the FCC $15 million as part of an investigation into the company.

The stock traded recently at $43, up 36.8 percent.

The FCC was investigating Straight Path's former parent company called IDT Corp and its spectrum licenses amid concerning reports from short sellers, including Kerrisdale Capital, who said in 2015 the stock could fall more than 90 percent.

As noted by Straight Path in its press release, the FCC has officially ended its investigation and the company can now move forward with the vast majority of its nationwide 39 GHz spectrum fully intact, and its 28 GHz spectrum unchanged.

The settlement also stipulates that if Straight Path doesn't announce the sale of its spectrum license within the next year, it will need to pay the FCC $85 million or return its licenses.

"We are pleased that we were able to achieve a comprehensive settlement with the FCC," Straight Path Communications CEO Davidi Jonas said, "which allows us to move forward as the largest holder of 39 GHz spectrum, with about 95 percent of the total licenses commercially available at this time, as well as a significant holder of 28 GHz in major markets, including New York and San Francisco. These licenses allow us to continue as a leader in the next frontier of telecommunications."

In conjunction with Straight Path's settlement announcement, the company also said it has hired bankers at Evecore Partners to explore strategic alternatives.

Posted-In: FCC Federal Communications Commission Kerissdale Capital Straight Path Straight Path CommunicationsNews Legal Tech Best of Benzinga

 

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