NextNav Inc

Nextnav Inc. (NN) is positioned as a terrestrial backup to GPS and a spectrum play, currently awaiting a Notice of Proposed Rule Making from the FCC to utilize its wireless spectrum for 5G communication. Despite regulatory delays, the company has made significant strides in improving its balance sheet, including the conversion of convertible debt to equity. This transition is expected to enhance market perception, as Nextnav will be viewed as a cash-rich company rather than a highly leveraged one. The CEO's recent testimony before Congress and the request for testing permissions indicate strong support for Nextnav's technology, which is anticipated to coexist with existing technologies. The value of Nextnav's spectrum is expected to rise as satellite direct-to-device communications gain traction.

NextNav Inc is our wireless spectrum and alternative GPS investment. The thesis is that since the United States desperately needs a terrestrial backup to the GPS system, the Federal Communications Commission (FCC) will allow NextNav to repurpose its existing spectrum for 5G wireless communications that will also bring a terrestrial backup GPS system to the masses. When greenlit for 5G, NextNav’s spectrum should be worth multiples of where NN stock currently trades. During the quarter, several positive developments occurred, including FCC Chairman Brendan Carr highlighting the need for a GPS backup and NextNav's proactive engagement with the FCC, indicating that their proposal is progressing. Additionally, the strategic move of their CFO to a corporate development role signals imminent approval from the FCC.

NextNav Inc is positioned as a critical player in providing a terrestrial backup to the GPS system, which is increasingly recognized as a necessity by the FCC. The company has made significant strides, including filing important documentation with the FCC and moving its CFO to a corporate development role, signaling imminent approval for their spectrum repurposing for 5G. This move, along with the recent pricing of similar spectrum, suggests a potential valuation for NextNav's stock that could approach $60 per share. Despite short-term market reactions, the long-term outlook remains strong due to regulatory support and strategic positioning.

NextNav, which is our next-gen GPS and spectrum company, continues to march the ball forward in their quest to have the FCC greenlight their spectrum for 5G use. I continue to believe that the odds of NextNav succeeding are very favorable. This belief comes from the obvious, such as reading FCC filings where NextNav is specifically named, but also from more and more articles highlighting the vulnerabilities of the existing GPS system and the National Security needs of the United States. Additionally, it is hard to interpret the official FCC Twitter/X account re-tweeting articles written by NextNav’s CEO as a bad sign.

NextNav, our next generation GPS / wireless spectrum investment is our largest position, and was the largest drag on our performance over the last few months. However, the fundamental developments here have been undeniably positive, and have set us on an accelerated timeline toward success. The odds that NextNav’s petition for rule making is approved have gone up considerably, especially with recent support from the FCC. This investment has very little attachment to the real economy, and over time should prove to be completely uncorrelated to the stock market. Those are attractive qualities during times of uncertainty.

NextNav, our next generation GPS / wireless spectrum investment is our largest position, and was the largest drag on our performance over the last few months. However, the fundamental developments here have been undeniably positive, and have set us on an accelerated timeline toward success. The odds that NextNav’s petition for rule making is approved have gone up considerably, especially with recent support from the FCC. This investment has very little attachment to the real economy, and over time should prove to be completely uncorrelated to the stock market. Those are attractive qualities during times of uncertainty.

NextNav, our next generation GPS / wireless spectrum investment is our largest position, and while it has been a drag on performance, recent developments are undeniably positive. The FCC's support for improving GPS accuracy aligns with NextNav's technology, increasing the odds of success for the company. The refinancing of their debt provides a war chest to address opposition to their spectrum goals, and strategic investors enhance their position. The potential value of their spectrum could be worth 3-5x the current stock valuation, making this a compelling investment.