September Satellite Stock Round-Up
[Satellite News 09-30-08] September was a rough month for the commercial satellite market. The overall market decline that followed the U.S. House of Representatives’ rejection of the Emergency Economic Stabilization Act Sept. 29 took several technology and satellite stocks down with it.
Satellite News outlines three significant movements of the month – most of them down.
Satellite TV Stocks Drop
The Sept. 29 stock shake-up saw satellite TV shares falling sharply after Dish Network lost a major marketing deal from AT&T. Analysts downgraded the Dish Network stock to "hold" from "buy" and called the company’s ability to boost subscribers into question. Dish Network shares sank by $4.58, or 18.5 percent, to $20.03 by the end of the month. Chances of AT&T acquiring Dish Network (a rumor that was whispered by speculators for years) now seem less than slim.
DirecTV Group Inc. declined from about $28 a share in August to less than $24 per share by the end of the month. DirecTV snatched the AT&T partnership away from its competitor, and some analysts expect the company to get a boost. However, DirecTV did not escape the end of the month panic on Wall Street as its stock value dropped nearly 11 percent Sept. 29 to $23.65 per share.
SkyTerra Communications Makes Several “Buy” Lists After Busy Month
Several analysts put SkyTerra Communications on their hot buy lists Sept. 24 just before Mobile Satellite Ventures (MSV) announced it was cooperating with the Fairfax County Office of Emergency Management and the Fairfax County Department of Public Safety Communications to create and manage the South East Satellite Mutual Aid Radio Talkgroup (SE-SMART) operating on the MSV satellite communications network on Sept. 25.
The company also saw a slight boost earlier in the month when Harbinger Capital Partners purchased $65.2 million in SkyTerra stock.
SkyTerra still finished under the value it opened the month at approximately $3.75 on the over-the-counter (OTC) market.
Tech Stock Drop Drags Satellite Radio, Wireless Manufacturers Down With It
Qualcomm, which signed an agreement with MSV to integrate satellite cellular chipsets with terrestrial handsets, dropped 13 percent Sept. 29 to approximately $40 per share. The company rallied slightly Sept. 30, but still finished the month $10 below its per share value at the star of September.
Sirius XM Satellite Radio also fell more than 18 percent Sept. 29 to close at $0.62 a share, as the company told investors Sept. 23 that it expects to post a $350 million adjusted loss from earnings before interest, taxes, depreciation and amortization in 2008.
Sirius XM remains in danger of being delisted, according to analysts, as the stock has been traded for less than a dollar a share for most of September.