It seemed like such a no-brainer, at least as far as the folks in Grand Bahama were concerned: the arrival of a major player in delivering what our president calls "the Internets."

Pegasus Wireless (OTCBB: PGSW) announced months back that it was coming onto the island to employ locals in building its "revolutionary" networking technology, stuff that would -- allegedly -- compete with offerings from big names like Apple (NASDAQ:AAPL), Cisco (NASDAQ:CSCO), Netgear (NASDAQ:NTGR), and even Microsoft (NASDAQ:MSFT).

The problem is, of course, that the stories told by Pegasus CEO Jasper Knabb do not always square with reality, as I've explained here, here, and here. And this doesn't really pass the smell test, either. Do we really believe this tiny company has better technology than those titans? And if it did, why on earth would it be building the stuff in the Bahamas and not in Asia, where this sort of business is normally done, because that's where the low-cost providers are? It was only 14 months ago that Knabb was touting his Asian manufacturing acquisitions. Now he's going to close them down and move everything to Grand Bahama? Even if that made business sense (I doubt it), wouldn't Knabb's fickleness give the good people in Grand Bahama reason to wonder if they won't see similar treatment a year from now?

Now, it seems the press in the Bahamas -- which was fawning over the prospect of jobs, not to mention believing Knabb's story about "revolutionary" technology, and his spending "his" money -- has finally awakened to smell the coffee. Noting that Knabb's song and dance seems politically motivated, and perhaps orchestrated to force the local officials into granting a license, the editorial page of the Freeport News has turned sour on both Knabb and Pegasus.

If the good editors there will take the time to read what I've found on Pegasus, Knabb, and the rest of his merry band, I have a feeling Knabb and his crew may find themselves suddenly feeling a lot less welcome. And maybe the elected officials responsible for cozying up to Pegasus should do a little homework as well. (Hint to editors and officials: When you are finished with my articles, take a look at the cash flow statement. The stock price that concerns you is only a symptom of the real disease.)

I doubt the politicians in Grand Bahama will want to associate themselves with a cash-burner like Pegasus, lest they, like Pegasus' beleaguered shareholders, end up holding an empty bag. Wanting to provide jobs for residents is an honorable goal, but know your partners. Knabb and his CFO have histories that should make officials think twice.

At the time of publication, Seth Jayson was long Microsoft common and calls, but had no positions in any other company mentioned. View his stock holdings and Fool profile here. Microsoft is a Motley Fool Inside Value recommendation. Fool rules are here.