Worries over the Federal Communications Commission's planned auction of C-band satellite spectrum for use by 5G internet providers has shocked the stock of satellite communications company Intelsat S.A. (OTC:INTE.Q) -- still down nearly 85% over the past 52 weeks.
This morning, though, Intelsat stock is recovering and bouncing off of its losses -- up 20.8% as of 11:35 a.m. EST -- in response to (what investors are perceiving as) good news from the FCC: An auction is imminent.
What worried investors about the FCC's auction, and why are they more hopeful about it today? In essence, worries have centered on two concerns.
First, investors worry that the FCC might limit Intelsat and its peer satellite communications companies to taking just a couple of billion dollars out of an expected total auction price of up to $77 billion for all the 3.7 to 4.2 GHz (C-band) spectrum in question.
And second, investors worry that because this will be not a privately organized auction by the spectrum holders, but a "public auction" run by the government, it will be a long, drawn-out affair that will deny Intelsat and its peers any auction proceeds for months, or perhaps even years, while the government dawdles.
Today's news seems to be allaying that second concern. In an "event summary" published on the Information Technology & Innovation Foundation website this morning, it was announced that ITIF will be hosting FCC Chairman Ajit Pai on February 6 as he announces "the next steps in repurposing a large portion of C-ban spectrum to fuel 5G deployment in the United States."
The specifics of the chairman's address have not been revealed, but ITIF notes that contrary to expectations, the FCC is planning to hold its auction "in short order." And if that's the case, while it might not mean more money for Intelsat, it might at least mean the company will get its hands on its money a bit quicker.
Apparently, investors today see that news as good for a 21% bump in share price.