Loral space announced late this week that they got hit hard by the problems in Asia and major customers pulled out from their order backlog waiting list. As a result, major layoffs were announced and projects in Asia were terminated.
Orbital Sciences does not have this problem at all!!! They have no Asia affiliation and are 100% homegrown! No orders were postponed, but on the contrary new order backlog was established during the quarter setting backlog to over $3 billion...
This problem with Loral Space could have an enormous positive impact on Orbital. It is bad enough that LOR sells at a PE ratio that is astronomical (PE is well over 200), but LOR has an enormous debtload it can not seem to get rid of. If it was not for Qualcomm, Globalstar would probably never get launched for lack of financial backing. I feel the Asian crisis will postpone the launch of Globalstar and Orbital will be able to get a much greater headstart on winning more marketshare in the satellite communication service industry! Orbital is much more diversified than LOR and can handle competition, but can LOR handle ORBI? NO WAY!!!
Once people realize this good news, ORBI will go back up this next week BIG TIME! Qualcomm licenses Mobile Communications which contracts Orbital Sciences. Qualcomm still makes money with the Orbital global network (ORBCOMM), even if Globalstar fails. Qualcomm is putting its money on both sides as it seems. By the way, Qualcomm fell Friday on LOR's announcement also.
THE ULTIMATE WINNER IS ORBITAL SCIENCES BY A LONG SHOT!!!
Speaking of insider activity did you see the activity in Globalstar...any coments??? What amazes me is that it took ORBI quite some time to iron out the rough spots, which I believe by the way and therefore represent such a good investment. Iridium and Globalstar, however keep going up. While I believe there is a much greater interest in the sector now I can't help but think the others look alot like ORBI in 94 when it ran to 26 - or am I missing somethinga??????
An insider who sells just before a big drop in stock price (that they know about) would get so creamed by securities fraud leaches, they won't ever consider it.
Insider buying is a good indication of belief in upword movement, but these folks at ORBI who sold are doing it for all the reasons anyone else sells stock : taxes, building a new house, paying for their daughter's wedding, that sort of thing.
As for INTC buying ORBI...that's insane. They might as well go into food service. Its not the same business.
When you say that Orbital has "no Asia affiliation and is 100% homegrown" you must not be including the entire company.
Orbital's MDA subsidiary has built quite a few remote sensing ground stations in Asia, and I'm sure MDA is or will be affected by the Asian problems. For example, after getting some breakthrough subcontracts for NASDA systems a few years back, there has been no further major Japanese work (although it didn't help that they lost contact with their ADEOS satellite).
That said, I don't think the Asian problem will really have any overall effect on Orbital.