Viasat Inc.’s stock plunged more than 28% Thursday after the communications company disclosed a problem that could affect one of its satellites.
The ViaSat-3 satellite was launched from Cape Canaveral on April 30 to help expand Viasat’s
VSAT,
North American fixed-broadband business.
But William Blair analyst Louie DiPalma said that the satellite setback, while frustrating, has prompted an outsized reaction. “We believe this stock selloff is largely driven by emotion as there are a number of mitigating factors that soften the blow,” he wrote in a note Thursday, adding that insurance and Viasat’s acquisition of Inmarsat will lessen any impact.
“The recent acquisition of Inmarsat already provides Viasat with global coverage, which was one of the original goals of the ViaSat-3 constellation,” DiPalma wrote.
William Blair reiterated its market-perform rating for Viasat.
However, Raymond James analyst Ric Prentiss warned that the ViaSat-3 problem could be “a major blow” to the timing of Viasat’s growth story. “The coming months will be pivotal as Viasat looks to address the issue and bring the satellite into at least partial service,” he said in a note released Wednesday.
In a statement released Wednesday, Viasat described “an unexpected event” that occurred during reflector deployment on its ViaSat-3 Americas satellite.
“We’re disappointed by the recent developments,” Viasat CEO Mark Dankberg said in the statement. “We’re working closely with the reflector’s manufacturer to try to resolve the issue.”
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Contingency plans are currently “being refined to minimize the economic effect” on Viasat, the company said.
This story originally appeared on Marketwatch
