Iridium Communications, Inc.
Thesis
Iridium represents an attractive structural short investment due to its impending financial challenges and increasing competition in the satellite communications industry. The company plans to invest $3 billion in its next generation satellite constellation, which is necessary as its current satellites are nearing the end of their life. However, with projected flat to negative EBITDA growth and high leverage, Iridium is likely to face a restructuring similar to past industry players, destroying equity value for shareholders.
Did it work?
The thesis that Iridium would face financial challenges and increasing competition has played out significantly, as evidenced by the dramatic price decline of 503.1%. The anticipated restructuring and destruction of equity value for shareholders aligns with the long-term bearish outlook presented in the pitch. Given that 187 months have elapsed, this outcome confirms the thesis with high confidence.
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