Laughing Water Capital, an investment management company, released its second-quarter 2026 investor letter. A copy of the letter can be downloaded here. The second quarter was exceptionally good for the portfolio, with Class A investment in Laughing Water Capital returning approximately 39.8% net of all fees and expenses, bringing the YTD return to approximately 33.6% net. The SP500TR and R2000 returned approximately 15.0% and 21.5%, respectively, in the second quarter. The impressive performance was driven by three of the top five positions being acquired, with its largest position nearly doubling during the quarter. The letter emphasizes that patience can often lead to profits in an inefficient market characterized by fluctuations, suggesting that investing in undervalued stocks can yield good long-term returns. In addition, please check the portfolio’s top five holdings to know its best picks in 2026.
In its Q2 2026 investor letter, Laughing Water Capital highlighted NextNav Inc. (NASDAQ:NN). Headquartered in Reston, Virginia, NextNav Inc. (NASDAQ:NN) is a technology company that specializes in positioning, navigation, and timing (PNT) solutions that offer Pinnacle, an accurate altitude service for public safety applications. On July 14, 2026, NextNav Inc. (NASDAQ:NN) closed at $15.30 per share, reflecting a market capitalization of $2.09 billion. NextNav Inc. (NASDAQ:NN) posted a one-month return of -17.34%, while its shares gained 0.66% over the past 52 weeks.
Laughing Water Capital stated the following regarding NextNav Inc. (NASDAQ:NN) in its Q2 2026 investor update:
“NextNav Inc. (NASDAQ:NN) – NextNav, our terrestrial backup to GPS / spectrum play remains in limbo as we await a Notice of Proposed Rule Making (NPRM) from the Federal Communications Commission (FCC) that will allow Nextnav to use its wireless spectrum for 5G communication. Despite the regulatory delay, the company has made significant progress in cleaning up its balance sheet. Notably, during the quarter the company’s SPAC warrants were called and convertible debt was converted to equity. In the near-term events such as these can weigh on share price due to arbitrage opportunities and hedging. However, in the intermediate term when the quants that dominate the markets next see a Nextnav balance sheet they will be looking at a cash rich company rather than a highly levered company. It would not surprise me to see short covering on this change.
Moving away from trading dynamics and toward political tea leaves, during the quarter Nextnav CEO Miriam Sorond testified in front of the U.S. House Energy and Commerce Subcommittee on Communications & Technology, alongside representatives of several of the groups that oppose Nextnav’s plan. Not surprisingly the opposition warned of interference risks if Nextnav’s plan is granted, while Sorond noted that recent real-world testing showed no interference. Following this meeting Nextnav asked the FCC for permission to run tests that will demonstrate that their proposed 5G operations can coexist with existing technologies in the 902-928 MHz band in and around the actual U.S. Capital Building. I do not think the FCC would approve this request if they were not strongly in favor of Nextnav’s technology and confident that this test will not result in interference problems…” (Click here to read the full text)