Straight Path share prices jumped more than 50 percent when the company announced a settlement with the FCC last week, but one hedge fund says that market optimism is “badly misplaced.”

Kerrisdale Capital, an activist hedge fund that shorts certain stocks it believes are overhyped, released a report Thursday that claims Straight Path’s spectrum is “worth far less than the company’s current half-billion-dollar market cap” despite its expansive 28 GHz and 39 GHz holdings in prime 5G territory.

Why? Well, as broadcasters in the FCC’s spectrum incentive auction recently found out, the spectrum may not be worth as much as people think it is.

“Verizon is set to buy a similar amount of higher-quality spectrum from a sophisticated, deep-pocketed seller – Carl Icahn – for just $200 million, 61 percent lower than where Straight Path trades, implying massive downside for its stock price even before taking into account the harsh FCC penalties,” Kerrisdale wrote in its report, referencing Verizon’s recent deal with XO Communications. “Adjusting for these penalties and the lower quality of Straight Path’s spectrum, we believe the true downside exceeds 70 percent.”

Given that Straight Path holds less than $10 million in cash, with an annual burn of $7 million and a looming $15 million fine that must be paid over the next nine months, Kerrisdale said it is “beyond absurd” to believe the company will be able to hold out to get higher prices for its airwaves.

Aggravating the situation, the report noted, is the FCC’s recent decision to open up large swaths of spectrum above 24 GHz – particularly in the 39 GHz band. That means there is plenty of other pasture for potential buyers to graze, diluting the value of Straight Path’s holdings.

“As much as management might want to raise capital and hold out for an unrealistic sweetheart deal, a little-noticed term of the FCC settlement makes that a dangerous strategy, allowing the FCC to re-open its investigation after twelve months and potentially revoke Straight Path’s Licenses,” Kerrisdale noted in its report. “Likewise, shareholders confident that Straight Path’s former parent company will foot the bill for its fines fail to appreciate the legal subtleties that put this outcome in serious doubt.”

In response to Kerrisdale's conclusions, Straight Path issued a statement saying the report had "no credibility" and was "nothing more than a transparent attempt by a short seller to recoup the money they lost last week" in the wake of the FCC settlement.