Q: Hello, is the Echostar termination of contract something to be concerned about or on a longer term basis do you see this as a buying opportunity?
Thanks for all your help,
Mike
Thanks for all your help,
Mike
5i Research Answer:
It is a negative, as any lost contract would be, but it is not a call on the company nor its ability to execute. Echostar has been selling licences and its overall strategy has changed. The option to cancel existed and the contract was only announced on Aug 1. But SATS has done a complete shift in strategy. MDA gets compensated for any expenses it has had to date. Most contracts do have some 'exit' clause. We see the dip as more of an opportunity to buy than anything of long term true concern.