Ray Blanco’s “Death to Cable” stock: What the heck is “Halo-Fi?”

"On October 1st, This Weird Rooftop Pod Will Deliver the Death Blow to 'The Big 3' Cable Companies"

By Travis Johnson, Stock Gumshoe, October 2, 2017

“On October 1st, This Weird Rooftop Pod Will Deliver the Death Blow to ‘The Big 3’ Cable Companies… With One Clean Shot”

That’s the opener of the latest ad for Ray Blanco’s Technology Profits Confidential, which is selling subscriptions with the promise that you can get rich and shut down America’s most hated companies at the same time. So what’s he talking about with this tale that you can “turn a single paycheck into $110,661 when America’s most hated monopoly finally goes six feet under?”

He doesn’t mention what kind of paycheck we’re talking about, of course, whether it’s $1,000 or $40,000 that turns into $110,000… but he does in several places talk up what “could” be a 5,349% windfall.

So where are these riches coming from? The short answer is “satellite internet,” which for many years has been the province of billionaires who are sick of having too much money.

But let’s get into the long answer so we can see if it’s clear which stock he’s teasing. Then, heck, maybe you’ll decide you’d like to risk a subscription… that’s your call. But start out with some knowledge first, if you don’t feel like you’re buying a “secret” stock tip and you can go into any newsletter subscription with a little healthy skepticism and the ability to think for yourself, then you’re much less likely to do something stupid risky once you get that “secret tip.”

The big idea is that several large companies are backing a low-earth orbit constellation of satellites that could deliver broadband-speed internet to areas of the world that aren’t currently connected by fiber-optic cables. Here’s a bit more from the ad:

“… companies like…

* Virgin Group
* Airbus
* Qualcomm
* And even Coca-Cola

“…have poured nearly two billion into launching the specific technology I’m going to tell you about today.

“Even Fortune recently reported that following these companies’ lead is a way for main street investors to ‘win big’ right now.

“Because not only could this new breakthrough deliver faster, cheaper, reliable internet directly to your home…

“It’s also going to give you a perfectly solid connection in your car driving through the mountains… on your boat out at sea… at your cabin in the deep woods…”

Sounds good, right? I know my kids really, really, really want to have broadband internet in our car, taking away that one part of the day where they have nothing to do but read a book or listen to their parents (if they start putting wifi or broadband in all modern cars, we may have to go back to driving our 1966 Oldsmobile full time… even the AM radio doesn’t work, they’ll have no choice but to absorb our parental wisdom).

So what is it that Blanco is pitching here? A solution to that “last mile” or rural customer is a big part of it — he brings up several examples of folks who can’t get broadband access because they’re out in the country, or just don’t have the right fiber optic cables in their neighborhood. More from the ad:

“Customers now using internet from the heavens have called it a game changer – clocking in at 12 times faster, yet 10 times cheaper than what they were forced to use before.

“Here’s the best part…

“Until now, the precursor to this extraordinary technology has only been rolled out to 15 countries around the world.

“But soon, it could replace dial-up, cable, DSL and even fiber in every city and town in America.

“Making the lives of virtually every American more affordable and far less stressful.”

The bad news? Ray Blanco keeps mentioning this October 1 deadline — apparently that’s the date by which you have to “position yourself” to take your share of the $251 billion internet market. So how is it that we’re supposed to position ourselves? Let’s get a few more clues from the pitch:

“A stunning breakthrough in something called ‘L.E.O. transmission’ is about to snap up most – if not all – of that hugely profitable market and make technological history.

“And at the center of it all sits a tiny, privately-held company that holds the exclusive legal rights to use their technology to connect every human on the planet – with the virtual flip of the switch.

“Not only will this company change the whole world’s perception of what an internet provider is, it is also poised to make investors very, very rich.

“Once they launch their breakthrough L.E.O. transmission project, they are poised to tap into an additional $35 billion of profit every single year – just in the US alone.”

That “Halo-Fi” refers to a network of low earth orbit (that’s the L.E.O. bit) satellites which travel far closer to the earth than most satellites and therefore get rid of the latency problem that has been a serious limiter for the speed of satellite-based internet — Blanco refers to them as “micro-routers” that circle the earth about 750 miles over our heads…

“It Takes Just Three Halo-Fi “Micro-Routers” to Cover an Area the Size of India.

“And to blanket the entire earth in high-speed internet?

“As this company is about to prove, it could take as few as 648 micro-routers.

“Then, once the switch is flipped on, receiving internet in your home is simple.

“No spotty modems. No outdated copper. No fiber.

“You don’t even need to buy an antenna.

“You’d simply need to be near a school, public building or municipal building that has a receiver on its roof and your phones and computers will automatically log on.

“Now, if you prefer, you can buy your own receiver for a one-time payment of about $200.”

So what they’re talking about is a company called OneWeb, which used to be called WorldVu. It was founded by Greg Wyler, who has long been a scrappy internet provider entrepreneur (driven by both profit and social missions, apparently — one of his biggest projects was wiring Rwanda for broadband), and his company now features some huge backers on its Board of Directors, including Richard Branson, Suni Bharti Mittal, and Paul Jacobs of Qualcomm, who all participated in OneWeb’s $500 million Series A funding round…. and it also received a massive $1.2 billion investment from Masayoshi Son’s Softbank, and, with Softbank’s help, nearly merged with Intelsat (I) earlier this year before that merger was squashed by Intelsat’s debtholders.

But OneWeb is, as Ray Blanco notes, private. That means you can’t invest in it. So what’s the story with this investment tease? More from the ad:

“Launching this company’s entire constellation of micro-routers – including a network of receivers on Earth you can automatically log on to – is expected to cost just $3.5 billion.

“So not only are we talking about the most reliable internet the world has ever seen…

“We’re also talking about possibly the least expensive way EVER to launch it.

“Which, by my cost analysis, will then translate into a monthly charge of no more than $7 a month for users just like you.

“Which means we’re really talking about…

“A fundamental shift in the history of the internet itself.

“And my intelligence points to October 1st as the day this private Halo-Fi company begins the process of going public on the stock market.”

OK, so that’s part of it, there’s some plan to begin the process of going public, and for some reason Blanco’s intelligence points to yesterday, Sunday, as the day that process begins. But he’s not just talking about buying this stock if and when it goes public…

“But here’s the catch…if you want to claim those gains for yourself, you have to take action BEFORE October 1st.

“Because I’ve developed a ‘one-two’ profit punch” strategy to capitalize on this world-changing technology before AND after it makes its way onto the public markets.

“It’s a simple strategy…one that could make you a cool six-figures before the year is out.”

What else might be causing this “rush” for a company that already has a $1+ billion investment from Softbank for a project that in its entirety, according to Blanco, will only cost $3.5 billion? Apparently there’s a deadline:

“… in 2012, the CEO of this company successfully secured the global rights to operate his Halo-Fi technology exclusively within the ‘microsatellite band’ of space.

“Under the first-come, first-serve ITU rules that govern the deal, if this company can get their microsatellites operating any time before the end of 2019, they have the sole rights to operate inside this band.”

That’s not necessarily the full story, Wyler did get hold of the previously failed Teledesic’s spectrum rights, which were first granted well over a decade ago (Teledesic was a previous low-orbit internet satellite constellation company that failed, despite big backing from Bill Gate, Craig McCaw and the Saudis, and stopped work in 2002), so these projects didn’t begin just in 2012… though Greg Wyler did indeed file first with the ITU, and that is indeed a “first-come, first serve” license that requires OneWeb to get their satellites up by 2019 to claim that spectrum and license and force everyone else (if anyone else proceeds with actually building a constellation) to work around their spectrum or cooperate with them.

That “first place” position has helped Wyler get all this funding — it was after that license that they got their big Series A funding back in 2012, and since then other big partners have reportedly been sniffing around, including a possible deal with Google that didn’t materialize and, more recent, the big Softbank investment. It also almost led, reportedly, to a possible partnership with Elon Musk’s SpaceX — though SpaceX seems now to be more of a competitor than a collaborator, and One Web is planning to use Branson’s Virgin Galactic and use the New Glenn rocket from Jeff Bezos’ Blue Origin to launch its satellites (instead of SpaceX).

There are other not-very-well-known projects who have registered with the ITU beyond SpaceX, too, all of them essentially getting in line to stake their claim on spectrum and satellite slots in case OneWeb misses its deadline — most of those projects began their filings a little under two years ago, right after Google and SpaceX got a lot of press coverage for their satellite ambitions. Last year we even saw a teaser pitch for an Aussie company that was pitched as “critical” to SpaceX’s satellite internet plans, so this story is out there in the investing world. (That pitch was about space junk and the risk it poses to satellites, incidentally — and the stock has done pretty well, though the connection to SpaceX is obviously quite tenuous.)

But still, the fact remains, OneWeb is private. How does one invest in it? Assuming you want to?

Well, if you want to invest in it before the IPO, the only way to do that is by buying shares of one of OneWeb’s publicly-traded backers that participated in one of their venture funding rounds. That would mean Qualcomm (QCOM), Airbus (EADSY), Coca Cola (KO), Hughes Network Systems (Echostar), or Intelsat (I)… or, of course, Softbank (SFTBY) itself, though Softbank’s investment in OneWeb represents only about 1% of its market cap (Softbank may be a fine buy if you like Masayoshi Son’s decisions, but its prospects depend far more on major investments in Sprint, ARM Holdings, Alibaba, Didi Chuxing, NVIDIA and others).

Either that, or you could participate in the idea of OneWeb’s mission by buying one of the other possible partners for OneWeb now that the Intelsat deal has failed (it was scrapped in June, mostly because bondholders wouldn’t accept the massive writedown offered by Softbank, but most people seem to think that OneWeb would do better if it collaborated with an existing satellite company) — those other suitors would presumably be the other major commercial satellite fleet operators like Telesat (half owned by Loral Space (LORL)), Gilat (GILT), Iridium (IRDM), Viasat (VSAT), Orbcomm (ORBC) and Echostar (SATS).

If those are the choices you give me, I’d be most inclined to take Viasat (VSAT) or Echostar (SATS) seriously, though Qualcomm (QCOM) is certainly the one that has the most reasonable valuation and is clearly a fine buy as long as the Apple dispute doesn’t completely destroy their royalty revenue in the future (that’s not at all guaranteed, unfortunately, and I sold my QCOM a while back). VSAT is one of the largest holdings of Seth Klarmann’s Baupost, which is a pretty strong vote of confidence, and SATS has both an ownership stake in OneWeb and a compatible consumer-facing business that’s profitable and growing earnings, though it certainly ain’t cheap.

I have no insight into who Softbank might pursue in Masa’s plan to consolidate OneWeb with an existing operator, but those are decent companies that are worth a look and are small enough (VSAT and SATS, at least) to see a significant economic impact from this planned satellite constellation. Airbus seems most economically involved in OneWeb’s actual operations, since they’re OneWeb’s partner on their satellite-building factory in Florida, but Airbus is one of the largest space companies in the world in addition to being the second largest aircraft manufacturer, and OneWeb’s little project won’t make much of a dent on their income statement.

As to whether OneWeb itself will be worth an investment once it becomes available in an IPO, that depends, of course, on what the valuation is. (And it doesn’t necessarily have to happen — there’s abundant private capital out there for a tech company like OneWeb that’s run by a charismatic founder and has a gold-star board. The Intelsat merger would have effectively brought them public without an IPO, and that could happen with some other partner.)

There’s no rush on that front, though, not unless you’re hurrying to fill up the subscriber rolls for your newsletter — OneWeb (or WorldVu, if they keep using that name with the SEC) has not filed an S-1 or otherwise given any indication that they’re on the verge of an IPO.

Satellite internet is an appealing idea, though the notion that it can replace fiber optic connections or next-generation wireless with comparable speed and cost remains pretty untested — and satellite networks are, even in this age of billionaire-funded private space companies, awfully expensive to build, deploy and maintain. There’s a reason why so many satellite companies have had balance sheet problems (like Intelsat), and why the pursuit of private space flight requires billionaires to open their own wallets — space is hard and expensive.

Which doesn’t mean that OneWeb won’t work out as a great advancement for mankind, or even a great investment, but, if you’re researching this idea, I’d keep your expectations a little closer to the horizon. If you’ve looked into private satellite businesses, or OneWeb, or have any similar favorite ideas to share, please shout ’em out with a comment below.


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35 Comments on "Ray Blanco’s “Death to Cable” stock: What the heck is “Halo-Fi?”"

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Tim Singleton
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0
Tim Singleton
Beats me what to do. Seems like there is some money to be made but there are so many degrees of freedom(is that the right phrase?) of what could happen that I have no confidence in my ability to actually make the right call. Buffet says, even though he is a Democrat(sigh), don’t invest in what you don’t understand. Okay. Benjamin Graham said rule number one was to NOT LOSE MONEY. Okay. So much is going on here that I am not in a position to understand that I would say my odds of losing money are WAY higher than… Read more »
keelfoot
Guest
0
keelfoot

I lost my butt several years back when I invested in Iridium satellites and held onto the stock as it became worthless… but those stinking satellites kept on orbiting and I assume that some Fed agencies continue to use them. No thinks, it seemed to make sense way back then… I still feel the pain. Learned that lesson.

SoGiAm
Irregular
8904

Iridium Communications Inc
NASDAQ: $IRDM – Oct 13, 4:41 PM EDT
Far from worthless Keelfoot. #Best2YOU

Gordon Long
Guest
0
Gordon Long

Judging by the bounce today (not to mention after-hours), I’d humbly submit IRDM as a candidate partner for OneNet in this context. Iridium has had its problems, but it certainly seems to be a survivor in the L.E.O telecoms business spaces . . .
Just a random Monday thought,
Gordon

Gordon Long
Guest
0
Gordon Long

Oops — I meant One Web . . .
My bad,
Gordon

cocobolo
Irregular
35
I see a few things that don’t quite add up here. Firstly, Ray Blanco is pushing it, therefore I suggest that this is somewhere right around 99% pure B.S. I am already a satellite internet customer here in the western part of Canada. The cost isn’t anywhere near as low as Blanco claims, nor is it 12 times faster. Here’s the facts. Our local land based ISP cost us $56 a month, including taxes and ran at 6.7 Mbps during normal daytime traffic. It also goes out every time the wind blows and knocks a tree on to the power… Read more »
thinairmony
Irregular
-233
JDV1956
Guest
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JDV1956
Wellll…..I have had Agora’s service for the past 12 plus years, and MOST of the recommendations I have received have made me a lot of money. It’s softbank (SFTBY). That said, I bought (I), and (S), because they are both in bed with OneWeb…dig a bit farther into both and you will find that info out. I also bought (SFTBY), based on their overall portfolio, and investing strategy, as well as their financials. They seem to be big at supporting startup techs, and emerging techs, and bringing those companies to market. Do your own due diligence, of course.
JLCoops
Guest
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JLCoops

JDV, How have they performed thus far, post purchase?

JDV1956
Guest
0
JDV1956

Since I bought in on the 4th…Intelsat is up $1.40/sh,,, Softbank up 18 cents/sh (I don’t expect that will climb as fast),,,and Sprint is fluctuating up 0.20/sh yesterday, but dropped off today. Sprint is in play as a “buyout/merger” with T-Mobile, and Softbank owns over 3 Billion with a B, shares of Sprint.

seussdr13
Member
0
seussdr13
I do not think Blanco has any edge on which company may benefit most ahead of time, pre IPO if ever occurring; if he said SFTBY, that is safe – if SFTBY unlikely to double once system gets launched; Blanco justifies double by his numbers / he could rely on them, as scalable to actual business results, if stock fell short of double. I think more likely Web One would want to merge with existing public company if: 1) partner was small enough to give WO the financial benefits/control to WO existing investors WO seeks, and 2) partner is functional… Read more »
BJI
Guest
0
BJI

I had DirecTV satellite in both Michigan and here in Iowa. The signal was lost EVERY TIME it rained more than a few drops or snowed more than a few flakes!!! Will this new service do the same thing?

Joe
Guest
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Joe

That was the point of LEO (low earth orbit) was that it is only 750 miles up instead of 33,000 miles (geo synchronous orbit)… so it sounds like NO the weather will not KILL the signal… plus with 2648 of them up there you can be sure the signal strength is ten times that of satellite comm.

Dan
Guest
0
Dan
The proximity to the earth has very little to do with what we call rain fade. The proximity to the earth can improve signal latency. Radio waves travel at approximately 300,000 kilometers/second, so by default, the closer the satellite to earth, the less latency from radio wave propagation delay. Most likely only online gamers and real-time traders care about the latency differences we’re talking about here. There are many other factors that come into play with latency though, so be careful. Now, for rain fade, that is an element of the frequency the radio waves are transmitted at. The carrier… Read more »
thinairmony
Irregular
-233

It’s safe look up (http://) stands for. Check out this link Ray Blanko should be his name broadband
https://en.m.wikipedia.org/wiki/Spectrum_auction

Ryan
Guest
0
Ryan
Hmmm great idea one web has. Big name backers, lots of money and the ability to pull thru. Airborn wireless seems like a better bet to me then this halo of low orbit satellites. Put the technology into every airplane built and criss cross the globe with relays poof accomplish the same thing cheeper and easier. However airborn wireless stock has suffered lately for some reason. Maybe the talk of this halo has people thinking of other solutions for connecting the plantet on one internet thus taking the spot light off certain companies and turning it into a strobe light.… Read more »
thinairmony
Irregular
-233

Link on space junk in orbit- http://www.wired.com/story/story/the-space

thinairmony
Irregular
-233
https://www.wired.Author: Lisa GrossmanLisa Grossman science The growing cloud of space junk surrounding the Earth is a hazard to spaceflight, and will only get worse as large pieces of debris collide and fragment. NASA space scientists have hit on a new way to manage the mess: Use mid-powered lasers to nudge space junk off collision courses.The U.S. military currently tracks about 20,000 pieces of junk in low-Earth orbit, most of which are discarded bits of spacecraft or debris from collisions in orbit. The atmosphere naturally drags a portion of this refuse down to Earth every year. But in 1978, NASA astronomer… Read more »
Bud
Guest
0
Bud

Travis-You should be the new Fool. What a great report. Why not start your own financial advisory service. I will join.

WorkingStiff
Guest
0
WorkingStiff

He has, Bud! This is a subscription-based website Travis is running. And here’s the real kicker: since he just uses other folks’ research and marketing, he gets all his juice without having to dirty up his hands on the squeeze. Pretty smart, eh?

Theblackestcat
Guest
0
Theblackestcat

GSAT would be my guess
thanks trav

GlTA
TBC

JDV1956
Guest
0
JDV1956

I must say one thing about Blanco…he IS new to Agora, and therefore has yet to have a proven positive track record. He has the smarts, but seems to recommend stocks that nosedive shortly after recommendation. If his newsletter on this topic had not been backed by a senior adviser, that I have trusted over the years…I NEVER would have given it a look. But THAT adviser made me a killing in (TTPH) a few yrs back, and in (SRPT) recently. By the way…I am up in all 3 positions I took after the rec.

Robbie
Guest
0
Robbie
Sorry if I sound stupid, but do I understand correct that your only option for internet in the USA is currently via cable ? It cannot be ! I also cannot really figure out if this Halo-Fi is to provide TV signals or internet. I live in the third world – South Africa. Above all, I live on a farm in the middle of nowhere. Since I started using internet about 14 years ago, I got it via cellular towers. First it was quite slow, but as technology improved, it got faster. I get 3G speed and it’s fast enough.… Read more »
Thomas Dolislager
Guest
0

As a U.S. wireless industry expert, I can confirm that cell site based, fixed wireless internet is already here and will be expanding dramatically in rural markets. Speeds are in the 100s of GBs.

Satellite just can’t compete – especially on upload speeds.

SoGiAm
Irregular
8904

Hi Robbie! Thank you for sharing your South African Experience(s).
Regarding Brokerages you may consider InteractiveBrokers.com which offers discount trades in nearly every Global market. Integrated Financial Management with Lower Costs and Higher Returns* One World, One Account… Very satisfied with their service since 2015.
Long Gr8Gummunity! Best2YOUalwayz
>>>–BenJammin’—————->

Jeffrey Shultz
Guest
0
Jeffrey Shultz

I just signed up as a premium member (or elite or whatever the lifetime membership is called) and I’m already enjoying the hell out of every search result I read here!

Thanks for the work you do!

manhattanmadman
Irregular
43
manhattanmadman

Try subscribing to each thread by email. You will be able to read the comments via your email client as they come in. Changed the way I view this board ensuring I see all the activity. There is an older thread with most the activity and that gets moved to a newer thread every so often.

thinairmony
Guest
0

Be careful signing up for every article, Because your inbox will over flow. I did that with a couple and started getting emails every minute.

thinairmony
Guest
0

Just surf is the best way. And just sign up for daily news letter. You’ll find articles (threads) that you want to follow. Check out top row very good tool of any page.

Helen
Guest
0
Helen
Not having your expertise I have read your article, as I would dearly like to be rid of my cable company that is greedy, and as their prices raise, (it seems monthly) their service deteriorates it seems. If I am not mistaken, you are saying that VSAT and SATS are the best way of investing in the success of this Halo Fi, as it is “private” unless of course you pay for yet another newsletter that claims to be able to read the future. I am naturally skeptical that there are so many people that knew everything ahead of time,… Read more »
nmartinsd
Irregular
3
nmartinsd

What about bandwidth? You cannot have millions of subscribers all trying to communicate with satellites at the same time even if there are hundreds of satellites. Forgetting uploads you have to communicate with the satellites every time you load a new page or switch to a different web site. The numbers just don’t add up.

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