Why Intelsat Stock Just Lost Another 21%
Pity Intelsat (NYSE: I) investors -- they just can't catch a break.
Yesterday, as you'll recall, Intelsat stock was routed after Federal Communications Commission Chairman Ajit Pai tweeted his support for proposals in Congress to publicly auction off C-Band spectrum licensed to Intelsat and the other members of its C-Band Alliance. The alliance, or CBA, had been hoping to sell C-Band spectrum to 5G internet providers privately, reaping rewards of perhaps $60 billion in revenue. But now, Congress appears intent on taking over that process, probably delaying it and possibly appropriating much of the profits for the U.S. Treasury.
Image source: Getty Images.
That news sparked a 40% sell-off in Intelsat stock yesterday. Today, the stock is down another 21.2% as of 11:35 a.m. EST -- and this time, it's Wall Street that's to blame.
After close of trading yesterday, when it was too late to help (or hurt), Street analyst J.P. Morgan cut its price target on Intelsat stock by more than half, to just $9 a share. Fellow analyst Evercore ISI soon followed suit with a downgrade of Intelsat stock to "in line," and a price target cut to $11 -- less than one-third of Evercore's previous prediction.
The analysts' views on yesterday's news aren't as important to investors as the news itself, of course. But the simple fact that Wall Street is now publicly turning its back on Intelsat, and removing its predictions of megaprofits from the table, appears to have shaken investor confidence.
Last night, when the price target cuts and downgrades were made public, it was already too late to trade in response to them. With trading resumed this morning, investors finally got their chance to react -- and their reaction is to sell.
10 stocks we like better than Intelsat
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has quadrupled the market.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Intelsat wasn't one of them! That's right -- they think these 10 stocks are even better buys.
*Stock Advisor returns as of June 1, 2019