Phil Falcone:  Get a Life!!!  From all indications, the hedge fund manager for Harbinger Capital Partners Fund II seems to be the last person on earth who believes that "light will shine one day" on LightSquared, the much maligned telecommunications company.  Which seems tragically sad for Harbinger investors who essentially have been hostage to 'Falcone's Follies' and illusions.

We use the word "seems" to couch our uncertainties - no one at C-I is capable of fully comprehending the business and technical aspects related to the products and services LightSquared is attempting to create and provide to consumers.

However, we know what we have read, and seen the project repeated fail critical milestones - including the government's decision to revoke its provisional approval for LightSquared to build out its network.  Here are some of the numbers and timeline disappointments that we considered in evaluating the situation:

• the fund lost nearly 30% in February - due largely to LightSquared.  (Hedge funds on average were up nearly 2%.)
• for the first 2 months of 2012, the Harbinger Capital fund  fell ~27%.  While there was some improvement in January's performance, it didn't last long as more problems hit LightSquared.  (Hedge funds on average were up 4%.)
• the heavy losses in the portfolio coincided with news that the U.S. government planned to revoke its provisional approval for LightSquared to build out its network after tests showed the network would interfere with GPS's used by the military and commercial airliners, et al.
• Falcone is wagering his career and portfolio largely on bringing LightSquared wireless service to rural America.
• LightSquared makes up over half the $4 billion Harbinger Capital fund.
• Falcone often takes his time, relative to other hedge fund managers, in releasing monthly performance numbers.  Given his losses for January and February, the delays are not surprising. [C-I Note: What would happen if the numbers diverged even further, or more troublesome news needed to be reported?]
• for 2011, the Harbinger Capital fund 47% because the LightSquared investment had to be revalued.
• after the government revoked its approval, the LightSquared operations, based in Reston, VA, has had to lay off scores of employees and replaced its CEO.
• Falcone, who has invested over $3 billion in LightSquared, told investors during a February investor call that he remained committed to the project.
• outside auditors were responsible for marking the portfolio down and Falcone said it was out of his control, adding that he felt the revaluation was only temporary.

For further details, go to: [Reuters, 3/26/12].