Shares of Motley Fool Rule Breakers recommendation GeoEye (Nasdaq: GEOY) rocketed upward this morning, blasting past 9% as of this writing. But why?

From where this Fool sits, the only news of note is the fact that a new competitor is about to enter the public markets. Satellite imagery company DigitalGlobe just confirmed its intent to file for a $250 million IPO. Call it a hunch, but my guess is that investors see the increased exposure of the DigitalGlobe IPO as a good thing for GeoEye. More publicity may attract more investor interest, leading to a higher stock price.

If that's the thinking on the Street, then I'm not convinced. In fact, this line of thinking seems even more wrongheaded than the logic that sent GeoEye soaring earlier this month on news of the continuation of a contract with Mitsubishi. There, we were looking at a simple case of investors mistaking "no news" for "good news." Here, the mistake seems more serious -- here people are mistaking bad news for good.

Of course, I use the term "news" loosely. We all knew that DigitalGlobe was on the IPO track, already, and at Rule Breakers, we've even pegged DigitalGlobe as GeoEye's most serious competitor. Although GeoEye's "Dash-One" satellite has finally been freed from testing at General Dynamics (NYSE: GD), the company has yet to persuade Boeing (NYSE: BA) and Lockheed (NYSE: LMT) to put the bird in the sky -- where DigitalGlobe's WorldView-1 has been orbiting for six months.

Now comes the news that GeoEye's rival is set to tap the public markets that, to date, GeoEye has had all to itself. While far from a disaster, I don't see how anyone can call this "good news" for GeoEye. For one thing, GeoEye's chief rival will be getting better access to cheap investor financing, which it can use to build more satellites and further develop relationships with potential GeoEye customers. (DigitalGlobe already has heavy hitters like Oracle (Nasdaq: ORCL) and Google (Nasdaq: GOOG) in its camp.)

Moreover, investors' attention will soon be split between two potential investments in satellite imaging. Prior to DigitalGlobe's IPO, it was GeoEye or nothing. That's no longer the case -- or it won't be soon.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.