Viasat (VSAT 1.55%) stock saw big sell-offs over the last week of trading trading. The satellite telecommunications company's share price ended the weekly session down 19.4% from the previous week's lose, according to data from S&P Global Market Intelligence.
NASDAQ: VSAT
Key Data Points
Viasat's valuation sank this week due to news of a new satellite-communications service from a competitor and insider stock selling. On the heels of this week's pullback, the company's share price is now down 53% over the last year.
Viasat stock tumbles in response to insider selling
Last Sunday, T-Mobile announced the beta launch of its new satellite-based internet service through a partnership with SpaceX's Starlink division to provide . The full service will launch in July, with its base package starting at $15 a month. Viasat saw a moderate pullback in Monday's trading in conjunction with the news, but notices of insider selling plans submitted to the Securities and Exchange Commission after the market closed that day prompted a much bigger sell-off on Tuesday.
Triton Luxtopholding SARL, the Ontario Teachers' Pension Plan Board, and CPP Investment Board Private Holdings each filed disclosures indicating they planned to sell 3.75 million shares of Viasat stock. As large institutional shareholders in the company, each of these investors was required to give notice of their stock sales. Altogether, the three parties sold 11.25 million shares of Viasat stock last week -- a total that worked out to nearly 9% of the company's outstanding share count. The large selling action put downward pressure on the company's share price, and other investors seemingly responded to the insider selling news with their own divestments.
What's next for Viasat?
With the fiscal Q3 report that it published at the beginning of this month, Viasat reported non-GAAP (adjusted) earnings per share of $0.11 on sales of $1.12 billion. Sales were down roughly 0.4% year over year in the period, which ended Dec. 31. But while revenue was roughly flat, the company's order backlog was down roughly 5% to $3.54 billion.
Due to the nature of its contracts, it's not necessarily worrying for the company to see some unevenness when it comes to new contract awards and its order backlog. On the other hand, competition in the satellite telecom space is increasing rapidly, and Viasat's sales growth has stalled. This week's big insider selling moves may have been kicked off by concerns about competitive pressures from T-Mobile and SpaceX's new cellular service.
While the satellite-based internet market is big enough to support multiple winners and is seeing some big growth catalysts right now, it hasn't been enough to lift Viasat's sales performance. The company should still have some chances to capitalize on space-industry growth opportunities, but it looks like the business's core service offerings will face ramping competition.
