Technicians put the final touches on two of three Radarsat Constellation Mission satellites at the MDA facility Thursday, June 21, 2018 in Montreal. THE CANADIAN PRESS/Ryan Remiorz · The Canadian Press
Shares of MDA Space (MDA.TO) bounced around in negative territory on Friday, as investors weighed reports of Elon Musk’s SpaceX holding discussions to acquire one of its major clients. The situation raises the prospect of Brampton, Ont.-based MDA losing a second billion-dollar contract in 2025.
The company’s Toronto-listed shares sank as much as 7.2 per cent at the start of trading on Friday, before closing 5.39 per cent lower at $27.38. On Thursday, MDA’s stock closed over 15 per cent lower, prompting the company to issue a press release about the slide.
“MDA Space is monitoring fluctuations in our share price that appear to be the result of unconfirmed and speculative media reports related to mergers and acquisitions in our customer base,” the company stated Thursday, following a report from Bloomberg News.
According to the report, which cites confidential sources, U.S. telecommunications company Globalstar (GSAT) is exploring a potential sale, and has held early talks with SpaceX.
In February, MDA announced a $1.1 billion contract with Globalstar to serve as the main contractor for the satellite operator’s next-generation low Earth orbit (LEO) constellation.
SpaceX operates the Starlink constellation of LEO satellites for providing high-speed, low-latency broadband internet access.
Last month, shares of MDA Space plunged after the company announced the loss of a contract with EchoStar, another U.S.-based satellite communications firm. The contract had an initial value of about US$1.3 billion when it was first announced in August, with potential to grow to US$2.5 billion.
As it cancelled the deal, EchoStar announced a new US$17 billion deal with SpaceX.
MDA chief executive Mike Greenley told investors at the time that this was a “very unexpected event” for his company.
“This is obviously very sudden and a drastic change to the entire trajectory of EchoStar’s business. And so that’s a highly, highly unusual situation,” he said on a Sept. 8 conference call.
Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on X @jefflagerquist.
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