Viasat Inc. slumped a record 28% Thursday after announcing an unexpected event that threatened the performance of a key communication satellite.
(Bloomberg) — Viasat Inc. slumped a record 28% Thursday after announcing an unexpected event that threatened the performance of a key communication satellite.
The impacted satellite, the ViaSat-3 Americas, was launched April 30 on SpaceX’s Falcon Heavy rocket and is part of the company’s plans to bolster its North American broadband business. Viasat is working to resolve the problem and there has been no impact to coverage or disruption to customers, according to a statement. The company did not respond to Bloomberg’s request for additional comment.
“This issue could be a major blow to the timing of the Viasat growth story, as Viasat-2 (VS-2) has been capacity constrained in the Americas for many quarters, and the company has been counting on VS-3A to expand capacity in the Americas and resume fixed broadband subscriber growth,” Raymond James analyst Ric Prentiss wrote in a note.
Delta Air Lines, Inc. said the hiccup hasn’t lead to any meaningful impact on Wi-Fi on domestic flights, but could potentially delay the availability of international free Wi-Fi.
“If anything, it may cause a delayed rollout on some international markets, but it’s too early to tell,” said Ed Bastian, Delta’s chief executive officer on a Thursday earnings call with analysts and reporters.
While the setback is frustrating for the Carlsbad, California-based company, the stock fallout may be an overreaction, according to William Blair analyst Louie DiPalma.
“This stock selloff is largely driven by emotion as there are a number of mitigating factors that soften the blow,” DiPalma wrote in a note, adding that Viasat still has global coverage following its Inmarsat acquisition, can use a second satellite to cover North America and will likely receive a hefty insurance claim from the issue.
(Updates stock move at market close.)
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