All good things come to an end, and for shares of Canadian space tech company Maxar Technologies (NYSE:MAXR), that happened today. After four straight days of going nowhere but up, shares of Maxar suddenly plunged 10% in Wednesday trading.
Curiously, though while there was news concerning Maxar to report today, it wasn't exactly the kind of news you'd expect to send the stock into a tailspin.
Rather, Maxar announced the receipt of a follow-on contract from the U.S. Defense Advanced Research Projects Agency (DARPA), to continue experimenting with the use of machine learning technologies "to extract insights" from "18 geospatial data sources ... about the planet at scale and make critical decisions for projects like predicting food shortages, political unrest, and illegal, unreported and unregulated (IUU) fishing" -- a project known as the Geospatial Cloud Analytics (GCA) Hub.
Valued at $4.3 million, this follow-on contract grows the total value of Maxar's GCA-related contracts to $7.5 million.
Now, $7.5 million is not a lot of money for a company like Maxar, which does well over $2 billion in business annually. Still, $7.5 million is not nothing. It's certainly good news, albeit probably not great news.
So why is Maxar stock down today, and what are the chances it will keep going down? My guess is that today's decline had less to do with Maxar's contract win and more to do with the fact that investors are starting to twig to the realization that the "tax benefit preservation plan" Maxar announced on Monday is not actually as good news for the stock as investors may have initially believed it to be.
And considering most of the gains Maxar has enjoyed this week were tied to that earlier announcement, the belated realization that the tax benefit preservation plan was not, in fact, good news for Maxar could very well mean that this stock will keep on falling.