With much of the talk on Panamsat‘s IPO last month focused on the dividends that were paid out from the proceeds and from a dividend declaration that took place only seven business days after the stock went public, questions have lingered as to whether the company’s Private Equity (PE) owners–Kohlberg Kravis Roberts & Co. L.P., The Carlyle Group and Providence Equity Partners Inc.–would stick around long enough to see that the necessary capital investments are made to bring new satellites into the fold as needed when the time comes to replace satellites in the fleet, or whether the owners would get out before the need for those capital investments have to be made.

That question received at least a partial answer last week when Orbital Sciences Corp. announced April 18 that it signed a contract with Panamsat to provide it with a new satellite and options for two more. The new spacecraft will provide C- and Ku-band fixed telecommunications and direct-to-home television broadcast services from an unannounced Mid-Atlantic orbital slot.

The satellite, which will be christened PAS-11, will carry up to 18 active Ku-band transponders and 16 C-band transponders. It will generate approximately 4.5 kW of electrical power and will weigh about 2,500 kg at launch. Delivery of the satellite is scheduled in the first quarter of 2007.

While the news of a satellite purchase should put some of the “quick flip” fears to rest, it did not lead to a significant boost in the stock’s price. The stock topped out at $17.35 this week, holding consistently in the price range it has been floating in since it went public. We, at Satellite News, think this stock likely will remain at the level it is currently trading until the company gets a few quarters of solid financial performance under its belt.

Dow Jones Industrials

While Panamsat’s stock price may, on the surface, look a little disappointing, especially since it has not hit its IPO price of $18 even as a trading day high, company CEO Joseph Wright made an interesting point in his interview with Satellite News that the stock has pretty much remained consistent in its pricing while the overall market experienced a decline.

To put his comments in perspective, the Dow Jones Industrial Average, a benchmark that is used to assess the performance of the overall stock market, has been in decline since Panamsat went public. In fact, if you look at the period between March 17, the day of Panamsat’s IPO and the last full business day before this issue went to press, April 21, the Dow Jones Industrial Average was at its highest point on March 18 at 10,629.67 and went down from there, with a few minor bumps, to its lowest point, 10,012.36 on April 20. Considering the overall market has seen a drop and Panamsat has held its ground, even if at a price lower than many would like to see, it can be looked at as a good omen for the satellite operator going forward.

WorldSpace IPO

The latest satellite company looking to test the IPO waters is a satellite radio company. WorldSpace Inc., which provides subscription-based satellite radio services in Asia, Western Europe, Africa and the Middle East. The company said April 18 that it filed its Form S-1 with the Securities and Exchange Commission on April 13 for the initial public offering of Class A common stock. WorldSpace said UBS Securities LLC is the sole book running manager in the offering. According to the Washington Post, WorldSpace is seeking to raise $100 million through the IPO.

Again, this is an example that the satellite industry is feeling confident about returning to the public markets. It certainly helps that the two satellite radio service providers in the United States, Sirius Satellite Radio and XM Satellite Radio, generally receive positive words from Wall Street analysts and have succeeded to the point of driving change in the radio industry in general. However, whether WorldSpace will be able to ride on the coattails of its U.S. counterparts remains to be seen.