Notable Bulls And Bears In Straight Path Communications

Reason Behind The Spike

Straight Path announced that it has entered into a settlement agreement with the FCC on the previously disclosed investigation regarding its spectrum licenses.

The settlement agreement necessitates that the company pay a $15 million civil penalty in installments over a nine-month period. The company is also liable to pay the FCC 20 percent of the proceeds from the sale of its 39 GHz and 28 GHz spectrum licenses. While keeping all of its 28 GHz spectrum licenses, the company agreed to surrender 93 of its 828 39 GHz licenses, which leaves the company with a full national network of 735 licenses. In return, the FCC has agreed to terminate the investigation.

Kerrisdale's Bearish Bet On Straight Path

In October 2015, Kerrisdale Capital issued a negative report on Straight Path, reasoning that the company was worth at best 90 percent less than its market capitalization then, due to misconceptions regarding spectrum and 5G technology. The stock was trading around $47.58 at that time. Subsequently, it pulled back steeply.

Straight Path Also Had Bullish Bets

Arthur Samburg, who manages hedge fund Pequot Capital Management, picked up 691,900 shares in Straight Path or a 6.075 percent stake in July 2016 and has held it until recently. Assuming he had purchased the stock at the market value of $23.90 that prevailed at that time, he pockets a neat $12.52 million, roughly 76 percent gain in a six-month time frame.

At the time of writing, Straight Path was soaring 34.35 percent to $42.20.