NextWave Wireless Inc. (NASDAQ: WAVE) is trading up today on good news. The problem is that the news around the company is that it may be holding a fire sale. When debt is owed and when operations are a fraction of what were, the end result is often a company which has to give away assets to satisfy its obligations.
The company has made two announcements:
Coeur d’Alene Mines (CDE) Company posts loss in most recent quarter. Drops to $2 from 52-week high of $5.18.
Par Pharmaceutical (PRX) Cuts full-year guidance. Drops to $12.82 from 52-week high of $24.50.
Nextwave Wireless (WAVE) Low on cash. Falls to $.89 from 52-week high of $7.49.
ANADIGICS (ANAD) Warns on earnings and is downgraded. Sells off to $3.06 from 52-week high of $19.53.
Cogent (CCOI) Cuts revenue and earnings forecasts. Plunges to $7.31 from 52-week high of $30.16.
Douglas A. McIntyre
NextWave Wireless (NASDAQ: WAVE) amended a shelf offering late on Friday by selling stockholders of 9,101,718 shares of common stock to be periodically sold in one or more offerings. This stock has seen a huge run recently, and many investors get cautious on insiders selling shares after a huge move.
The filing was originally filed March 21, 2008 and at the time, about 92.7 million shares were outstanding before the offering. Since, about 10 million additional shares have been issued, changing the common stock to be outstanding following the offering to about 101.8 million shares and prompting the amendment.
The shares being sold by the selling stockholders were originally purchased in May 2007 for the acquisition of IPWireless. The mobile broadband and multimedia technology company will not receive proceeds from the offering. Very few of the selling stockholders will hold ownership of the company of greater than 1% following the offering.
We recently noted the company’s announcement that it was exploring the sale of its spectrum to focus on being a WiMAX and wireless technology company. This also was recently featured in our "10 Stocks Under $10" newsletter.
Shares of NextWave are down 2% in early morning trading to $6.75. The 52-week range is $3.35 to $10.44. While this would represent over 15-days volume if the shares all come out at once, the market seems willing to absorb at least a large portion of those shares.
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Rachel Lopez
May 12, 2008
NextWave Wireless Inc. (NASDAQ: WAVE) may be unloading its held spectrum assets to focus on core technology offerings. Last night it announced that it has retained Deutsche Bank and UBS Investment Bank to explore the sale of "its extensive spectrum holdings in the United States."
The company noted that its spectrum footprint covers over 251 million people (pops) in the U.S. and includes major markets such as New York, Los Angeles, Chicago, San Francisco, Boston, Philadelphia, Denver, Houston, and Detroit. It also includes licenses and lease rights for a total of 4.7 billion MHz/pops of spectrum comprised of the following:
The company said it has received multiple offers for its U.S. spectrum assets and this will allow it to strengthen the books, retire debt, and continue the commercialization of wireless broadband and multimedia solutions.
The products it wants to introduce are high-performance WiMAX and RFIC chipsets, advanced multi-mode, multi-band TD-CDMA, WiMAX and LTE enabled base station platforms, breakthrough MXtvTM and TDtvTM mobile television systems, mobile multimedia software solutions and platforms.
The last year has been tough for NextWave Wireless as shares closed at $4.75 yesterday, with a 52-week high of $10.44. After a brief look, the books are already in decent shape and that would signal the bulk of the funds would go toward commercializing their products rather than trying to own airwaves.
As its revenues are still minuscule this might actually work. Its market cap is $440 million and 2007 revenues were a low $59.1 million. The one analyst that follows it sees revenues to be some $123 million this year and $224 million next year, although we wouldn’t rely on that at all as it is one analyst.
But a spectrum sale also assumes their products are ready to go, are top notch, are well received, and that its already-signed partnerships come to rapid fruition. If not, then its just another technology company fighting in a crowded space.
Jon C. Ogg
April 24, 2008
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