One year ago, and when Intelsat’s share price was at a pretty miserable $3 a share its prospects were far from good. Burdened by a massive debt load, it was no surprise that the sharks were circling.
Yesterday, Intelsat’s share price ended a whisker away from $20 (and with a 26.8 per cent rise at one point during the day and hitting $20.57 at one stage) with investors thrilled at the prospects of a pot of gold waiting at the end of a C-band rainbow.
One commentator described Intelsat’s share performance as being something like a Hollywood film in terms of excitement. Certainly, Intelsat CEO Steve Spengler must be looking forward to a healthy – and justified – bonus! But first, he has to convert the rainbow’s pot of gold to certainty.
Some 11.9 million shares changed hands on June 20th, almost three-times the typical daily volume and helped by investment bank RBC Capital Markets giving the company an “outperform” rating and a massive $30 price target.
Last week also saw Intelsat raise around $730 million in a combination of new shares and lower-cost borrowing, and which will permit it to retire around 5 per cent of that $14 billion debt load.
Moreover, the RBC note to investors says that a favourable FCC ruling on the re-use of some of Intelsat’s C-band spectrum (and which would also impact SES in a similar fashion) would add $19 to the value of a share.
The Federal Communications Commission says that it will decide on July 12th whether to make more use of the mid-band spectrum. FCC chairman Ajit Pai says that the Commission has received some “creative ideas” for the usage of this spectrum.