Let's see....get a $100 million contract, lose ~$100 million in market cap. Does that make any sense?
This release needs some clarification. The contract does not START in 2003, it starts now. There will be some revenues over time until the constellation is deployed and revenues really ramp along with terminal sales. We should get some idea of that number during the CC. The deal whereby ViaSat agrees to purchase some capacity is not some kind of huge liability. Essentially, they can replace the space segment being used for the SAIC contract, for instance, with Astrolink space segment.
If one steps back even further, there is much more to gather from this contract. Our little ViaSat is growing up. They just landed the largest Ka-band terminal contract EVER,by any company. They have just become the only(so far) terminal provider to the most well funded, best partnered Ka-band constellation in existence. Also, remember that this same team of LMT and TRW are building the Advanced EHF system for the military, which is very much Astrolink-like. The terminals for A-EHF will make Astrolink look like pocket change. With ViaSat building temrinals for Astrolink, they have a very good chance at being part of the A-EHF terminal team. The first award in that area comes in Q3 2001, and is an initial award of $250 million. The incumbent is tough in the EHF space, but DLS was a tough incumbent in MIDS, and they are being whupped by ViaSat.
Next up? WildBlue should be deciding on terminal and gateway providers if they are to stick to the deployment schedule listed in their S-1. That would be a gem, with ample near term revenues. There are others out there as well. Every one of them should be looking at ViaSat as a neutral provider of complex equipment for satellite communications. ViaSat is not a competitor, merely a provider of equipment, something that gives them a leg up on Hughes and Gilat.
Stay tuned. |
