The biggest news affecting a publicly-traded company in the past five business days leading up to this issue’s June 3 publication was the launch of an investigation of Orbital Sciences Corp. by the Pentagon. The company announced May 27 that U.S. government agents from the Defense Criminal Investigation Services, executed search warrants at its Dulles, Va., and Chandler, Ariz., facilities. The service is an investigative arm of the Inspector General of the U.S. Department of Defense.
In a prepared statement, Orbital said it believes the investigation is focusing on contracting procedures on certain U.S. government launch vehicle programs. Orbital manufactures small launch vehicles used mainly by the Department of Defense and NASA as well as boosters for government missile defense programs. Orbital did not return a call seeking further comment.
Sandy Raynor, spokeswoman for the U.S. Attorney‘s office in Arizona, also declined to comment on the search. Industry observers speculated that the investigation may be related to technology transfer issues similar to those that affected Lockheed Martin and Boeing in the late 1990s.
While there has been no update on the story since Orbital went public with the news of the investigation, there was a noticeable reaction on Wall Street. More than 3 million shares of Orbital’s stock changed hands May 27 as the stock dropped 91 cents from its May 26 closing price of $10.57 per share. It was the most shares traded in a single day since Dec. 17, when Orbital’s roughly 2.96 million shares changed hands, most likely triggered by the company’s announcement of a successful missile defense test.
However, if investor confidence in Orbital has taken a hit due to the investigation, its share price in the days following the search is not an indication. After hitting $9.66 May 27, the stock closed up in each of the next three trading days and recovered a total of 42 cents, closing June 2 at $10.08. The slow rebound suggests that investors may be taking a wait-and-see attitude, and if this investigation yields no further negative consequences for Orbital, the one-day drop could be looked upon as a blip in big picture. However, if more damaging news comes forth as a result of the investigation, we expect the stock to take a greater hit than it did on May 27. Satellite News will continue to follow this developing story.
Inmarsat Jumps On IPO Bandwagon
Inmarsat is the latest satellite operator held by private equity investors preparing to take the plunge into the public markets, joining Panamsat and New Skies.
The company announced June 1 that it hopes to raise about 379 million pounds ($668.8 million) through an initial public offering on the London Stock Exchange. The company’s owners, Apax Partners Worldwide LLP and Permira Advisers Ltd. do not intend to sell their respective ownership interest as part of the IPO, a filing with the London Stock Exchange noted.
PA and NSE
With no major announcements from either company, Panamsat and New Skies held relatively steady the past two-weeks leading up to our production deadline.
Panamsat did come close to breaking the $20-barrier as a trading day high, climbing as high as $19.97 May 27 before ultimately settling at $19.29 that day. While the stock’s price did fluctuate throughout the observation period, it seems to have settled into a groove, trading consistently in the $19-range since May 24.
New Skies continued to move upward, hitting a trading day high June 1 of $18.22 before settling on a historic closing high of $17.85. It held that price of $17.85 June 2. The records come with no news, as the company remains in its quiet period until June 6, suggesting investors remain confident in the company’s future prospects.
