The Satellite News Financial Ticker

By | October 13, 2003 | Feature

Week of Oct. 3 – 9, 2003
Percentage Change
Symbol
Oct. 9 Price
One Week
One Month
Three Month
Year to Date
Operators
APT SATELLITE HLDGS ATS
2.30
9.5
(20.7)
(19.9)
33.7
ASIASAT TELECOM SAT
15.15
(0.3)
(11.1)
(12.4)
33.0
BRITISH SKY BROADCASTING BSY
43.00
3.5
1.9
(6.3)
7.3
ECHOSTAR COMM -CL A DISH
39.87
3.5
2.8
8.6
79.1
HUGHES ELEC (GM -CL H) GMH
15.10
4.9
1.4
11.6
41.1
LORAL SPACE & COMM LOR
0.33
26.4
32.0
(89.0)
(92.3)
NEWS CORP NWS
33.89
2.1
(1.6)
9.9
29.1
NEW SKIES SATELLITES NSK
5.80
2.8
19.6
39.8
PANAMSAT SPOT
15.51
3.7
(3.0)
(17.8)
5.9
PASIFIK SATELIT NUSANTARA PSNRY
0.19
(2.6)
131.3
32.1
23.3
PEGASUS COMMUNICATIONS PGTV
14.25
(4.2)
(16.2)
(55.1)
8.8
rSTAR CORP RSTRC
0.62
1.6
(17.3)
6.9
158.3
SES GLOBAL SESF.LU
6.90
4.9
12.9
21.1
7.8
SIRIUS SATELLITE RADIO SIRI
1.94
4.8
15.4
9.5
202.8
XM SATELLITE RADIO XMSR
17.99
12.8
23.4
40.0
568.8
Operators’ Average
100.00
4.7
10.3
(2.7)
76.4
Manufacturers
ANDREW ANDW
13.49
10.0
6.4
18.8
31.2
BALL BLL
56.57
3.1
6.4
25.3
10.5
BOEING BA
36.79
4.1
(0.5)
5.1
11.5
COM DEV INTL CDV.TO
2.12
(7.0)
6.0
46.2
114.1
EMS TECHNOLOGIES ELMG
19.10
12.2
4.0
37.2
22.7
GARMIN LTD. GRMN
44.58
7.0
1.3
5.0
52.2
GILAT SAT NETWORKS GILTF
5.67
23.0
14.5
15.5
(27.3)
GLOBECOM GCOM
4.31
11.9
(9.8)
16.5
14.9
HARRIS HRS
36.23
0.6
3.3
19.2
37.8
HONEYWELL HON
27.87
3.8
(7.3)
0.2
16.1
KVH KVHI
28.26
12.1
(8.0)
16.8
228.6
LOCKHEED MARTIN LMT
45.74
(1.5)
(12.4)
(4.8)
(20.8)
LUCENT TECHNOLOGIES LU
2.32
8.4
(2.1)
20.8
84.1
MOTOROLA MOT
13.73
13.2
21.7
39.1
58.7
NERA NERAY
2.19
8.3
(9.9)
35.9
102.6
ORBITAL SCIENCES ORB
9.45
(1.5)
(1.4)
22.9
123.9
QUALCOMM QCOM
43.66
3.1
2.8
10.6
20.0
RAYTHEON RTN
27.53
(3.4)
(15.6)
(15.5)
(10.5)
ROCKWELL COLLINS COL
25.88
1.6
(5.1)
1.4
11.3
SCIENTIFIC-ATLANTA SFA
34.60
12.0
(3.3)
31.3
191.7
SKY FRAMES SKYU
1.05
(4.5)
(16.0)
(38.2)
(86.9)
STM WIRELESS STMI
0.01
(75.0)
53.8
(50.0)
(95.0)
TITAN TTN
20.94
0.2
22.5
95.7
101.3
TRIMBLE NAVIGATION TRMB
24.25
2.6
(13.4)
(6.7)
94.2
VIASAT VSAT
21.35
17.6
27.3
44.3
85.0
Manufacturers’ Average
100.00
2.5
2.6
15.7
46.9
Nasdaq Composite Index COMP
1,911.90
4.3
1.2
9.5
43.2
S & P 500 SP50
1,038.73
2.0
0.7
3.1
18.1
SN Stock Price Average
100.00
3.3
5.5
8.8
58.0

Wall Street Analysis

By Tom Watts, SG Cowen Securities

EchoStar Communications [Nasdaq: DISH] has garnered lots of press with its overture to buy Loral Space and Communications [OTC BB: LRLSQ.OB]. Given the process it has chosen, we doubt that EchoStar is serious. The Oct. 15 bid deadline in Loral’s bankruptcy process will provide a test.

Loral’s pre-packaged bankruptcy provides a clear path for the disposal of its North American satellite fleet. Loral has signed an agreement with Intelsat to purchase the satellites for about $1.1 billion. If any third party submits a higher bid for those assets prior to Oct. 15, Loral will notify the bankruptcy court. An auction is scheduled for Oct. 20. The judge will issue a ruling on Oct. 22 approving the sale of the North American assets to the auction winner. This process provides no opportunity for EchoStar to buy all of Loral’s assets.

Instead, EchoStar chose an alternative path of submitting a letter of interest (LOI) to the Loral board offering to purchase all of Loral’s assets. Those assets include the six North American satellites, other satellites and related assets, and the Space Systems/Loral satellite-manufacturing arm. The Loral board could have chosen to recommend EchoStar’s offer and to introduce it into the bankruptcy process but it opted to reject it. EchoStar’s only chance is to convince Loral’s creditors to pressure the board to reconsider the offer, but that appears unlikely.

Under the Intelsat bid, Loral’s senior creditors would be largely repaid. Furthermore, the probability of the Intelsat deal going forward, barring a stronger bid, is high. Intelsat is a reliable organization and the purchase agreement has few material contingencies. The creditors would receive their money upon court and regulatory approval. By comparison, EchoStar offer would require the negotiation of a detailed purchase agreement and likely drag out for months. EchoStar is a notoriously tough negotiator. Moreover, even with an agreement, EchoStar has a reputation for backing out of deals even after they have been struck. It is doubtful creditors would chase the speculative possibility of a deal with EchoStar.

Tom Watts is a managing director and satellite analyst at SG Cowen Securities. He can be reached by phone at 212/278-4260 or by e-mail at tom.watts@sgcowen.com. Readers should assume that SG Cowen Securities Corp. and/or its affiliates intend to offer services in investment banking to the above referenced companies within the next three months, and to seek compensation for such services.

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