Maxar Shares Fall to Earth After Canadarm Maker Loses Satellite

(Bloomberg) -- Maxar Technologies Inc., the once-proud developer of the robotic arm used on U.S. space shuttles, hit a record low as the new year began where the old left off -- with a continuation of bad news.

The stock fell as much as 32 percent Monday, the most intraday since October, after the company reported one of its imaging satellites, WorldView-4, failed, can’t collect images and “will likely not be recoverable.”

A large chunk of the company’s near-term growth was dependent on WorldView-4, which will result in a loss of sales and potential earnings growth in 2019 and 2020, Raymond James analyst Steven Li wrote in a note.

Maxar changed its named from MacDonald, Dettwiler and Associates Ltd. and its head office from Vancouver to Westminster, Colorado, after it completed the purchase of DigitalGlobe Inc. in 2017. The C$3.1 billion ($2.3 billion) deal was supposed to give the company access to lucrative government customers.

But the stock has lost about 81 percent of its value since the deal closed on Oct. 5, 2017. Short seller Spruce Point said the stock was a "strong sell," then the company missed third-quarter earnings and has faced cash flow issues, even after amending its credit agreement. Maxar is carrying total debt of $3.1 billion, according to data compiled by Bloomberg.

The company’s business includes satellites, robotics, spacecraft systems, imagery and data and is perhaps best known for the space arm that was used on NASA space shuttles.

Canadian investors were already selling the stock after the company recently concluded its incorporation to the U.S. and before the loss of the satellite, Li said. The company should see U.S. investors buying the stock, but that’s unlikely to happen right away to match the Canadian selling, he added.

For Maxar then, it seems "when it rains, it pours," according to Li.

To contact the reporter on this story: Aoyon Ashraf in Toronto at aashraf7@bloomberg.net

To contact the editors responsible for this story: Courtney Dentch at cdentch1@bloomberg.net, ;David Scanlan at dscanlan@bloomberg.net, Jacqueline Thorpe

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