Week of March 21 – 27, 2003
Percentage Change

Symbol
March 27 Price
One Week
One Month
Three Month
Year to Date
Operators
APT SATELLITE HLDGS ATS
1.50
6.4
(4.5)
(10.4)
(12.8)
ASIASAT TELECOM SAT
12.65
2.1
2.2
12.7
11.1
BRITISH SKY BROADCASTING BSY
40.72
1.3
7.4
2.8
1.6
ECHOSTAR COMM -CL A DISH
29.83
0.5
14.1
35.8
34.0
GENERAL ELECTRIC GE
26.44
(1.5)
10.6
7.0
8.6
GILAT COMMUNICATIONS GICOF
0.18
45.8
16.7
GLOBALSTAR TELECOM GSTRF
0.07
(7.1)
(7.1)
18.2
25.0
HUGHES ELEC (GM -CL H) GMH
11.40
9.1
12.3
8.6
6.5
IRIDIUM WORLD COMM IRIDF
0.10
(9.5)
(9.5)
(17.4)
(13.6)
LORAL SPACE & COMM LOR
0.35
(5.4)
(14.6)
(18.6)
NEWS CORP NWS
26.08
(0.8)
5.0
0.4
(0.6)
NEW SKIES SATELLITES NSK
4.20
1.2
(1.6)
(0.2)
1.2
PANAMSAT SPOT
14.80
0.5
10.0
2.3
1.1
PASIFIK SATELIT NUSANTARA PSNRY
0.15
20.0
(6.3)
100.0
PEGASUS COMMUNICATIONS PGTV
14.05
(9.5)
(11.6)
11.4
7.3
SES GLOBAL 549343
4.38
4.8
(5.6)
(34.1)
(31.6)
SIRIUS SATELLITE RADIO SIRI
0.69
16.9
(10.4)
15.0
7.8
XM SATELLITE RADIO XMSR
6.77
26.8
43.7
138.4
151.7
Operators’ Average
3.4
2.4
17.9
10.9
Manufacturers
ANDREW ANDW
5.91
(1.8)
(22.3)
(42.8)
(42.5)
BALL BLL
56.20
3.7
8.0
11.8
9.8
BOEING BA
26.52
(4.7)
(5.1)
(18.0)
(19.6)
COM DEV INTL CDV
0.80
(3.6)
(7.0)
(16.7)
(19.2)
GILAT SAT NETWORKS GILTF
0.26
30.0
(33.3)
(38.1)
(33.3)
GLOBECOM GCOM
3.06
30.2
(1.9)
(3.2)
(18.4)
HARRIS HRS
28.10
(2.5)
(6.2)
9.9
6.8
HONEYWELL HON
21.98
(6.9)
(4.8)
(0.9)
(8.4)
KVH KVHI
11.86
9.8
18.7
37.6
37.9
LOCKHEED MARTIN LMT
47.25
0.9
3.1
(18.1)
(18.2)
LUCENT TECHNOLOGIES LU
1.48
(8.1)
(8.1)
14.7
17.5
MOTOROLA MOT
8.45
2.3
2.1
(6.1)
(2.3)
NERA NERAY
0.81
(8.8)
(5.5)
(26.7)
(25.7)
NII NORSAT INTL NSATF
0.84
5.0
(8.7)
(7.7)
(15.6)
ORBITAL SCIENCES ORB
5.51
(0.7)
(3.7)
21.9
30.6
QUALCOMM QCOM
37.60
(2.6)
9.9
0.9
3.3
RAYTHEON RTN
28.85
2.8
5.1
(5.3)
(6.2)
ROCKWELL COLLINS COL
18.46
(3.9)
(7.7)
(19.5)
(20.6)
SCIENTIFIC-ATLANTA SFA
14.11
4.5
8.8
17.3
19.0
STM WIRELESS STMI
0.02
(2.9)
(49.8)
(93.5)
(92.5)
TITAN TTN
7.45
(1.7)
(8.6)
(27.4)
(28.4)
TRIMBLE NAVIGATION TRMB
18.98
4.1
13.7
49.4
52.0
VIASAT VSAT
12.49
(1.3)
13.3
1.5
8.2
Manufacturers’ Average
1.9
(3.9)
(6.9)
(7.2)
Nasdaq comp
1,384.25
(1.3)
4.6
2.7
3.6
SP 500 sp50
868.52
(0.8)
3.7
(0.8)
(1.3)
SN Price Performance Average
2.6
(1.1)
4.0
0.7

Wall Street Analysis

By Tom Watts, SG Cowen Securities

General Motors [NYSE: GM] plans to hear proposals this week from the four companies that want to buy Hughes Electronics [NYSE: GMH] and its much sought after DirecTV unit – News Corp [NYSE: NWS], Liberty Media [NYSE: L], SBC [NYSE: SBC] and dark horse candidate Cablevision [NYSE: CVC].

After a painful three years, it appears GM finally will reach resolution of the Hughes ownership quandary, allowing investors to focus on Hughes’ operations rather than its merger and acquisition tribulations.

A nagging question remains. “How much will public shareholders benefit from the sale of Hughes?” We expect Hughes shareholders to gain 15 percent to 20 percent above the current stock value. We expect News Corp and Liberty Media to consider a bid together for more than GM’s 20 percent stake in Hughes. Such a bid could give public shareholders some cash out of a deal. Even more favorable to public shareholders, SBC may try to purchase all of Hughes, even compensating GM for the unfavorable tax treatment this structure would receive. That possibility might be the best short-term deal for Hughes shareholders. However, SBC’s commitment to bid remains unclear.

Cablevision is an intriguing dark horse. Press reports have provided the first confirmation of Cablevision’s interest. The cable TV operator is reported to be partnering on its bid with financial investors. If Cablevision bids successfully, we expect it would have to divest its cable operations to receive regulatory approval. Statements from Cablevision during the last year have implied a willingness to shift out of cable and into satellite.

We could even see Cablevision partnering with News Corp, given that the two companies jointly own regional sports networks around the country. We expect these networks to play a key role in differentiating DirecTV from other satellite TV operators if News Corp bids successfully for Hughes. Cablevision also is committed enough to satellite TV to be preparing for the launch of its own satellite to operate at 61.5o West Longitude.

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.

Stay connected and get ahead with the leading source of industry intel!

Subscribe Now