Photo: Viasat

An investment firm that holds a 2.6% stake in Viasat is advocating that the company spin-off or IPO its Defense and Advanced Technologies (DAT) business, calling it “undervalued and under-appreciated.” 

Carronade Capital Management, LP issued an open letter on Thursday about the DAT business. Viasat restructured its segments in mid-2024, bringing the company’s technology in encryption, cyber security, tactical gateways, modems and waveforms into the Defense and Advanced Technologies business. 

Carronade argued that Viasat is being priced as a challenged communications conglomerate, and the market is “barely” valuing DAT. The firm’s analysis found that the defense business alone could support a valuation of over $50/share, which is more than 3 times the current stock price. Viasat was trading at $16.43 on Thursday. 

“From a value perspective, Viasat is an aerospace and defense tech focused company first, that also happens to be in the satellite communications business,” the letter says.  

Carronade highlighted a number of opportunities for DAT in tactical networking and secure communications systems for the Golden Dome, next-generation encryption, and anti-jam networking for unmanned aerial systems.

“In our view, the DAT segment could be one of the most attractive standalone defense-technology platforms in the public markets today. With best-in-class margins, double-digit revenue growth, and significant exposure to next-generation defense and dual-use technologies, DAT is already delivering on a vision to which many public and private peers can only aspire,” Carronade argued in the letter. 

Viasat issued a statement in response, saying the company “welcomes constructive input.”

“As a leader in satellite infrastructure and connectivity, in-flight connectivity and critical military and government communication, Viasat is well-positioned to compete globally,” Viasat said in an Aug. 1 statement. “We are focused on executing Viasat’s strategy to strengthen our franchises’ earnings power, deliver sustainable, compelling operating and free cash flow, and reduce leverage while we review our portfolio to maximize long-term shareholder value. The board and management team will carefully evaluate Carronade’s ideas.”

This story has been updated with Viasat’s statement