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The Satellite News Finanical Ticker

By Staff Writer | June 23, 2003
      Week of June 13 – 19, 2003
      Perentage Change

      Symbol
      June 19
      One Week
      One Month
      Three Month
      Year to Date
      Operators
      APT SATELLITE HLDGS ATS
      2.68
      44.9
      61.4
      74.0
      55.8
      ASIASAT TELECOM SAT
      16.74
      3.3
      15.1
      31.3
      47.0
      BRITISH SKY BROADCASTING BSY
      46.80
      0.2
      6.2
      20.8
      16.8
      ECHOSTAR COMM -CL A DISH
      35.02
      (0.9)
      11.9
      16.5
      57.3
      HUGHES ELEC (GM -CL H) GMH
      13.17
      2.3
      2.5
      29.0
      23.1
      LORAL SPACE & COMM LOR
      3.22
      (8.0)
      (21.5)
      (8.0)
      (25.1)
      NEWS CORP NWS
      31.35
      (2.1)
      4.6
      24.9
      19.4
      NEW SKIES SATELLITES NSK
      5.92
      (0.5)
      (10.3)
      46.2
      42.7
      PANAMSAT SPOT
      18.53
      (3.9)
      3.1
      26.2
      26.6
      PASIFIK SATELIT NUSANTARA PSNRY
      0.09
      –
      (45.2)
      (32.0)
      (43.3)
      PEGASUS COMMUNICATIONS PGTV
      27.57
      1.9
      (7.6)
      74.9
      110.5
      rSTAR CORP RSTRC
      0.58
      (3.3)
      26.1
      65.7
      141.7
      SES GLOBAL SES.LU
      5.95
      4.4
      12.3
      41.7
      (7.0)
      SIRIUS SATELLITE RADIO SIRI
      1.80
      (12.2)
      31.4
      300.0
      181.3
      XM SATELLITE RADIO XMSR
      10.75
      (5.0)
      6.9
      138.4
      299.6
      Operators’ Average 100.00
      1.4
      6.5
      56.6
      63.1
      Manufacturers
      ANDREW ANDW
      9.88
      1.5
      1.9
      63.8
      (3.9)
      BALL BLL
      47.22
      (3.0)
      (11.6)
      (12.6)
      (7.8)
      BOEING BA
      35.50
      0.3
      16.7
      27.6
      7.6
      COM DEV INTL CDV
      0.54
      –
      20.0
      10.2
      (10.0)
      EMS TECHNOLOGIES ELMG
      13.56
      2.2
      12.7
      (8.8)
      (12.9)
      GARMEN LTD. GRMN
      44.14
      (11.3)
      (8.8)
      26.4
      50.6
      GILAT SAT NETWORKS GILTF
      4.65
      22.4
      8.9
      1.1
      (40.4)
      GLOBECOM GCOM
      3.55
      6.6
      22.4
      51.1
      (5.3)
      HARRIS HRS
      32.25
      3.3
      9.8
      13.4
      22.6
      HONEYWELL HON
      28.05
      1.0
      12.7
      17.9
      16.9
      KVH KVHI
      22.91
      0.5
      21.0
      129.1
      166.4
      LOCKHEED MARTIN LMT
      49.16
      2.2
      0.3
      3.9
      (14.9)
      LUCENT TECHNOLOGIES LU
      2.11
      (5.8)
      (10.6)
      31.1
      67.5
      MOTOROLA MOT
      9.62
      8.7
      8.1
      10.7
      11.2
      NERA NERAY
      1.54
      (2.8)
      15.1
      73.6
      42.5
      ORBITAL SCIENCES ORB
      7.65
      18.6
      36.6
      35.6
      81.3
      QUALCOMM QCOM
      36.92
      9.8
      21.8
      (5.9)
      1.5
      RAYTHEON RTN
      32.41
      0.6
      0.2
      15.1
      5.4
      ROCKWELL COLLINS COL
      23.73
      1.5
      2.2
      22.3
      2.0
      SCIENTIFIC-ATLANTA SFA
      24.89
      13.8
      22.7
      91.9
      109.9
      SKY FRAMES SKYU
      1.90
      –
      49.6
      18.8
      (76.3)
      STM WIRELESS STMI
      0.01
      (80.0)
      (50.0)
      400.0
      (97.5)
      TITAN TTN
      10.35
      –
      22.5
      32.0
      (0.5)
      TRIMBLE NAVIGATION TRMB
      25.65
      (1.5)
      6.6
      48.8
      105.4
      VIASAT VSAT
      14.20
      7.2
      21.0
      13.6
      23.1
      Manufacturers’ Average 100.00
      (0.2)
      10.1
      44.4
      17.8
      Nasdaq Composite Index
      S & P 500 COMP
      1,648.64
      0.2
      7.2
      17.7
      23.4
      SN Stock Price Average SP50
      994.70
      (0.3)
      5.3
      14.8
      13.1
      100.00
      0.4
      8.7
      49.0
      34.8

      Wall Street Analysis

      By Tom Watts, SG Cowen Securities

      Washington has now begun its scrutiny of the proposed News Corp [NYSE: NSK] acquisition of General Motors’ [NYSE: GM] stake in Hughes Electronics [NYSE: GMH] and its U.S. satellite TV unit, DirecTV. Senators on the antitrust subcommittee grilled News Corp’s Rupert Murdoch and DirecTV’s Eddy Hartenstein, while comments from EchoStar Communications [Nasdaq: DISH] and others flowed into the Federal Communications Commission. While few favor the deal, we believe it is headed for regulatory approval, subject to conditions.

      Murdoch already has agreed to abide by the rules for vertical integration of programmers and programming distributors that had been designed for integrated cable programmer/operators such as AOL Time Warner [NYSE: AOL]. These rules ensure that all distributors would have access to programming by News Corp and its Fox operations on favorable terms. However, no safeguards currently exist for pricing.

      News Corp/Fox has the incentive to raise the price of its programming to all distributors including DirecTV, EchoStar, and cable operators. For example, if Fox raised the price of Fox News by $1 per month, Fox would receive the additional $1 across all 90 million multichannel households and possibly collect $90 million more in monthly programming revenue. The increased expense incurred by DirecTV would only be $1 times its 11.4 million households, or $11.4 million per month. News Corp’s pro rata 34 percent share of the cost would be only $3.88 million per month, leading to a net gain of $86 million per month. The math shows a net gain of 86/90 or roughly 96 cents for every $1.00 of price increase. Fox would be hard pressed to resist this potential windfall.

      You might say the cable operators could refuse any price increase, just as they can do now. However, with News Corp controlling DirecTV’s nationwide platform, it would be in a unique position as a national content distributor to retaliate against holdout cable companies. In contrast, previous vertically integrated cable programmer/ operators only operated in selected markets, so they lacked the national market clout of a News Corp/DirecTV combination.

      Look for special conditions before regulators give the go-ahead.

      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 [email protected]. 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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