Markets

Why Maxar Technologies Stock Popped 21%

What happened

Shares of Canadian space tech company Maxar Technologies (NYSE: MAXR) wowed investors today with a big gain out of the gate -- up 21.4% as of 10:50 a.m. EDT. And I don't like to say "I told you so," but yeah, I kind of did.

Several months ago, Wall Street was giving up on Maxar stock, disheartened by the company's loss of its WorldView-4 satellite, a victim of failed gyros that prevented the satellite from operating properly. The good news is that Maxar had its satellite insured against such catastrophic failures and was hoping to offset the $155 million loss in book value with a $183 million insurance claim.

Schematic of satellites orbiting the globe.

Image source: Getty Images.

So what

This morning, Maxar confirmed that its insurers are going to make that entire payout -- $183 million, cash. Insurance payments from some insurers are already in the bank, and Maxar says the rest of the money should be received "within 30 days."

Now what

On the one hand, this is good news because it helps to make Maxar whole after its disaster of earlier this year. On the other hand, it's arguably even better news, because with this cash in hand, Maxar can more quickly pivot away from operating the kind of large digital-imaging satellites that are falling out of favor and instead invest its money in a new fleet of flexible, economical small satellites to broaden its coverage of the globe.

Maxar already has a name for the new satellite constellation: WorldView Legion. And now it has the money to build it.

10 stocks we like better than Maxar Technologies Ltd.
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 Maxar Technologies Ltd. wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

*Stock Advisor returns as of March 1, 2019

Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

MAXR

Latest Markets Videos

The Motley Fool

Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

Learn More