Commentary

We remain short shares of Straight Path Communications. As we argued earlier this month, Straight Path is dramatically overvalued relative to the most appropriate comparable transaction: Verizon’s potential future acquisition of XO Holdings’ millimeter-wave (mmWave) spectrum. Reaching this conclusion does not require any particular skepticism about the prospects of mmWave 5G. However, some investors – apparently taking marketing fluff at…

Today we’re announcing that we sent what’s called a Form 3949-A (Information Referral) to the IRS explaining why we believe DISH is violating tax law by taking approximately a billion dollars per year in tax deductions that it isn’t eligible for. These tax deductions stem from DISH’s amortization of the cost of its spectrum purchases. Some analysts value the cumulative savings over time at $6 per share – roughly 13% of DISH’s current equity value. However,…

Following our report on Sage Therapeutics, six sell-side reports were published defending Sage Therapeutics and insisting that the price decline following our initial report represented a buying opportunity for the discerning investor.  The points made in each report were similar, and we believe the two key points worth discussing are the placebo response rate assumption and the scientific rationale for using SAGE-547…

In the wake of our report on ClubCorp Holdings, several equity-research analysts have attempted to refute our arguments. Their notes focused on four major themes:

• The extent and nature of ClubCorp’s capital expenditures
• The escheatment risk and tax implications of the company’s membership deposit liability…

In the wake of our report on Sage Therapeutics, Asclepia Capital, a biotech-focused hedge fund, released a seven-page response purporting to “debunk” what it characterized as our “superficial analysis.” While we always appreciate substantive criticism, we disagree with all of Asclepia’s key points, which we address one by one below…

A sell-side analyst covering Sage hosted a call with one of the principal investigators (PIs) in SAGE-547’s Phase 3 trial earlier this week.  Although we had already spoken with the PI at length about super-refractory status epilepticus (SRSE) and SAGE-547, we think some of the points raised during the call will be helpful for other investors.

1. The PI agreed with our thesis that patient outcomes are tied to etiology, not temporary inhibition:

Sell-Side Analyst: …What’s your estimate, from your experience, of pediatric mortality? How much does this…

Kerrisdale will host a conference call on Thursday, September 24, 2015 at 11:00am EDT / 17:00 CEST to discuss their report on Bavarian Nordic.

To participate in the conference call, please dial 855-780-5918 (United States), 224-633-1732 (international), or 80-88-42-84 (Denmark) and reference the access code 46857298…

On Monday, December 1st, 2014, we met with the FCC to discuss the use of the unlicensed 2.4 GHz band and how the sophisticated LTE/Wi-Fi coexistence filters prevalent in many mobile devices today would, by subjecting Globalstar’s proposed TLPS to high levels of rejection, substantially impair its usefulness. To view the full comment, please click here.

This graph illustrates the impact that the filters inside many mobile devices have on Channel 14 signals: dramatic degradation. These filters are tiny devices that transform radio signals by allowing certain frequencies through but suppressing others. The y axis measures the attenuation, or suppression, of the signal. A more negative figure in decibels corresponds to a more attenuated signal. The x axis measures the frequency of the signal. At the high-frequency edge of Channel 14, the attenuation would be approximately 25 decibels — a reduction in signal strength of more than 300 times.

Source: Avago Technologies ACFF-1024 data sheet (p. 3), Kerrisdale analysis

Note: purple lines and label added to Avago graph to highlight the level of typical insertion loss at the edges and center of a hypothetical 802.11n Channel 14 (2474-2494 MHz).

One of the key purported advantages of Globalstar’s (NYSEMKT:GSAT) Terrestrial Low Power Service (TLPS) is the existence of a large number of 2.4GHz Wi-Fi devices that, according to Globalstar, have the technical ability to transmit on its channel but are prevented from doing so via firmware. As Globalstar wrote in its initial petition to the FCC (p. 3)…

On Monday, November 10th, we submitted a third ex parte letter to the FCC addressing Globalstar’s response to our October 10th and 22nd letters. To view the full comment, please click here.

On Wednesday, October 22nd, we submitted a second ex parte letter to the FCC discussing results of our own testing and predictive surveys. The letter examines flaws to Globalstar’s tests, contrasts TLPS with real-world network at Canal Park, and shows how TLPS interferes with normal Wi-Fi. To view the full comment, please click here.