Regardless of how the value was divided between cash and stock, the deal for the Inmarsat shareholders was for approximately $7billion. It's not enough to say "they got $430million cash plus stock sale" when in fact that represents a significant loss. On May 31 2023 at close, VSAT stock was worth $47 and it's been downhill ever since. Those 11.2 million shares were booked at $526million at close (completely independent of the $206million cash they booked at close), they are now selling those shares for $225million. Further, these large institutional sales don't just happen out of the blue. They typically involve advanced discussions and coordination with the board to avoid surprises. A sale of this size was known to lead to negative impacts to the stock, MD and GG couldn't keep them in the fold with the dream and the mythical beast and whatever. They chose to take almost a 50% haircut on their stock value to just walk away.
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Its been quiet lately... too quiet
Too little too late
We just need to weather this thru to mid-2025 at which point those placed on the board from the Inmarsat transaction will be able to act.
Do they still have the requisite shareholder backing after the Canadian pension plans bail?
It is what it is. We just need to weather this thru to mid-2025 at which point those placed on the board from the Inmarsat transaction will be able to act. At that point, farewell MD and GG.
Short sellers laughing all the way to the bank.
MD has long said the markets don't know how to value our approach to this business. Perhaps they do.
The $7bn figure was based on the VSAT share price at the announcement of the deal. It was $67 on November 8, 2021. It has not been anywhere close to $67 since.
Bankruptcy would have been a reality for viasat without the acquisition - it is the Rev and ebitda figures from inmarsat that allow to produce decent results - the issue is that mid long term there is no compelling story to fuel growth - focus is mainly on cost reduction including possible divestments - more consolidation is needed ideally with a Leo player to bring this venture back on track
The seller of those shares probably had information that most of us don't get too.
News reports are saying EchoStar, one of Starlink and Viasat's competitors, may file for bankruptcy later this year. If it can happen to EchoStar, it could happen to Viasat. These institutions will be glad they sold at $17/share if the stock is at $0 in a couple years.
I wonder if this drove them to prop up numbers this quarter with the "one-time" earning events.