Iridium Communications (NASDAQ:IRDM)

CAPS Rating: 5 out of 5

Iridium Communications Inc. provides satellite voice and data communications services to businesses, the U.S. and foreign governments, non-governmental organizations, and consumers worldwide.

Recs

4
Player Avatar JackCaps (24.16) Submitted: 1/2/2010 6:59:33 PM : Underperform Start Price: $8.10 IRDM Score: +0.46

Iridium offers unique communications products and services, but from an investors perspective I could not make sense of their SEC 10-Q quarterly report that was filed on 11/16/2009. They do about $80M in gross revenues a year, but during this past quarter they incurred a $34M charge due to "Change in fair value of warrants". I tried to find an explanation for this, but I could find none to my satisfaction despite over 60 occurrences of the "warrants" text in this document.

I sense that future earnings may suffer from additional charges due to warrants. Until they post some earnings with a return for the investor, I project that they will underperform the S&P 500.

Member Avatar megalong (< 20) Submitted: 2/9/2010 9:42:52 PM
Recs: 0

The warrant restructuring is on page 13 of the 10-Q.

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