What happened

Shares of heavily indebted satellite communications company Intelsat (OTC:INTE.Q) are up a healthy 10.7% as of 12:45 p.p. EDT Tuesday on the back of a pair of optimistic press releases -- one that came out yesterday, and the other today.

In yesterday's news, Intelsat announced the introduction of a "new end-to-end managed service for business aviation" called FlexExec. Intelsat says the new service will facilitate satellite-based "in-flight broadband connectivity" for passengers on business jets by providing enhanced satellite coverage along "high-traffic business jet routes." FlexExec will "[eliminate] uneven service and gaps in coverage" along these routes.

An unrelated announcement, just out this morning, hails Intelsat's "strategic investment" in Africa Mobile Networks (AMN) "to accelerate the deployment of mobile connectivity to unserved communities across multiple countries in sub-Saharan Africa." Using Intelsat's 23 satellites covering the continent, the company says that "African mobile operators will be able to extend their coverage with minimal opex and capex risk."

Satellite beaming transmission down to Earth

Image source: Getty Images.

So what

Combined, the two announcements appear to have added roughly $500 million to Intelsat's market capitalization (now just over $4.9 billion) over the past two days. With Intelsat's stock now worth more than five times what it was worth just one year ago, the company is rapidly evolving from one whose enterprise value was made up almost entirely by the value of its debt, and into a company whose enterprise value is comprised of...only mostly the value of its debt.

Now what

Granted, Intelsat still has $13.5 billion more debt than cash on its balance sheet. Granted, too, Intelsat is unprofitable and, according to analysts who follow it, unlikely to earn a profit before 2021 at the earliest. But with a market cap now more than a third the size of its debt load, it's clear investors are giving better odds to the idea that Intelsat will eventually begin generating enough cash and producing enough earnings to start paying down that debt.

Here's hoping they're right about that.

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