Intelsat stock is soaring this week after hedge fund Appaloosa LP, headed by billionaire investor David Tepper, snapped up almost three million shares in the satellite maker and issued a fighting response to the FCC’s plans to kick Satcom firms off the C-Band spectrum they helped bill.
Shares in satellite communication firm Intelsat (NYSE:I) have tanked in recent weeks after the US Senate introduced the final draft of the C-Band auction bill, which is aimed at freeing up bandwidth for mobile carriers to deploy 5G technology. The bill would require Satcom firms to hold a public auction, allowing 5G internet providers to bid on their current C-band satellite spectrum and cap incentive payments at US$1 billion, despite firms investing over US$50 billion in recent years. News of the bill sent Intelsat stock down over 85% in recent months.
The introduction of the bill would have such a negative impact on Intelsat that the firm had reportedly been considering filing for Chapter 11 bankruptcy if the Federal Communications Commission does not boost compensation for shifting to a new spectrum, a move that could potentially delay freeing up spectrum for next-generation 5G wireless use.
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However, Intelsat stock is rocketing this week after billionaire investor David Tepper scooped up nearly three million shares in the satellite communications company. Tepper’s hedge fund, Appaloosa LP, now owns around 7.4% of the Virginia-based firm. Tepper moved quickly to address the C-Band auction issue, writing a letter to the company’s board, urging it to withhold acceptance of the FCC’s order until a fairer commercial agreement can be reached.
“We are disappointed, to say the least, with the Board’s and management’s apparent acquiescence to the broad terms of the FCC’s latest proposal, which was clearly motivated by political considerations. The token compensation offered to Intelsat is an affront when compared to the values achieved in auctions of comparable spectrum across the globe over the past decade,” read the opening paragraph of Tepper’s letter. Appaloosa’s increased stake and fighting approach to the C-Band auction bill led to a 25% gain in Intelsat stock this week, with the FCC yet to respond.
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