Why Intelsat S.A. Stock Soared 82.7% in May

What happened

Shares of Intelsat S.A. (NYSE: I) climbed 82.7% in May, according to data provided S&P Global Market Intelligence.

Intelsat’s stock has posted explosive gains due to hints that the Federal Communications Commission (FCC) is leaning toward approving one of the company’s most important service initiatives. Shares also gained on news that the company had brought on a new vice president for its Latin America and Caribbean geographic segment.

I data by YCharts.

So what

Intelsat reported its first-quarter earnings results on May 1, posting a loss of $0.56 per share, which was significantly worse than the per-share loss of $0.43 targeted by the average analyst estimate. That’s an underperformance that might normally be expected to correspond with stock price declines, but comments during the company’s earnings call indicated that the FCC was open to the approval of its C-band spectrum proposal for 5G wireless internet — a development that would be very favorable for Intelsat.

The stock then popped 16% on May 31 following news that the company had hired a new regional vice president for its Latin America and Caribbean operations.

Image source: Intelsat.

Now what

Intelsat’s share price has cooled off a bit in June on the heels of its massive run-up. There doesn’t appear to have been any fresh news or announcements behind the declines this month, but the stock’s big gains on developments that are still speculative set up the potential for sell-offs.

I data by YCharts.

Intelsat’s share price has climbed more than 350% since April, with much of the gains likely tied to perceptions of an improving outlook for the company’s push to provide C-band wireless spectrum for mobile service providers. The company has a market cap of roughly $2 billion now and sees a big opportunity in providing spectrum for 5G, so shares could continue to see volatile swings in relation to news about the development of that market.

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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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