Intelstat Plummets 40% after FCC Made This Decision
Shares of satellite stock Intelstat were being demolished in Monday’s trading session, heading 40% lower on the FCC’s 5G decision.
FCC Chairman Ajit Pai said in a tweet that his agency “must free up significant spectrum” for 5G telecommunications.
The agency expects to begin a public auction of C-band to happen before the end of 2020. This of course came as a blow to satellite companies including Intelstat.
“The private auction would generate billions in proceeds for Intelsat and the other C-band operators,” analyst Chris Quilty told CNBC.
“I’ve concluded that the best way to advance these principles is through a public auction of 280 megahertz of the C-band,” Pai said. “I’m confident they’ll quickly conduct a public auction that will give everyone a fair chance to compete.”
“I’ve concluded that the best way to advance these principles is through a public auction of 280 megahertz of the C-band,” Pai said. “I’m confident they’ll quickly conduct a public auction that will give everyone a fair chance to compete.”
“The private auction would generate billions in proceeds for Intelsat and the other C-band operators,” Quilty said.
“The potential C-band proceeds gave Intelsat a path for deleveraging, which has otherwise escaped the company for the past 10 years.”
“What we’ll likely see happen, which is the worst case scenario, is that the satellite operators have every incentive to drag their heels and take this to the courts, because they’re no longer being compensated for this spectrum,” Quilty said. “People are assuming they’re still going to get something but they’re not going to get the $8 billion to $10 billion windfall they were expecting.”
Disclaimer: We have no position in Intelsat SA (NYSE: I) and have not been compensated for this article.