Shares of satellite-services provider Viasat (VSAT) took a sharp dive after the company disclosed on Monday evening that several prominent investors are planning to sell substantial portions of their holdings. By early trading on Tuesday, Viasat’s stock had plunged more than 19%, settling at $17.50. This decline occurred even as broader market indices, such as the S&P 500 and Dow Jones Industrial Average, showed gains of 0.8% and 0.5%, respectively.
The significant drop in Viasat’s stock price is primarily attributed to the announcement that some of the company’s largest shareholders, including the managers of Canada’s pension plan and the Ontario Teachers’ Pension Plan, intend to sell approximately 11.2 million shares. This sale represents about 9% of the company’s outstanding stock and is expected to be priced around $20 per share, according to filings with the Securities and Exchange Commission (SEC). These institutional investors initially acquired their stakes through Viasat’s 2023 acquisition of Inmarsat, a deal that involved issuing about 46 million common shares as part of the transaction.
The proposed sale is particularly significant because of the volume of shares being put on the market. Large-scale stock sales can have a considerable impact on a company’s share price, especially when such a significant portion of shares is made available all at once. This influx of shares typically creates downward pressure on the stock price, as it increases supply without a corresponding increase in demand. While these sales are classified as secondary sales—meaning Viasat is not issuing new shares or directly benefiting from the proceeds—the large volume of shares hitting the market tends to favor buyers, who can acquire shares at lower prices, over existing investors, whose holdings may lose value.
The sudden announcement of these sales has raised concerns among investors about the potential impact on Viasat’s stock performance in the near term. The market reaction reflects these worries, as the company’s stock saw a steep decline, outpacing the broader market’s performance on a day when major indices were generally positive.
In response to the news, Viasat has not yet provided additional details or comments regarding the proposed transactions. This silence has further fueled uncertainty among investors, who are eager to understand the potential implications of these large sales on the company’s future.
Viasat, a company known for providing space-based communication services to governments, businesses, and mobile broadband users, has been navigating a challenging landscape in recent years. One of the company’s primary concerns has been the shrinking of its U.S. fixed broadband business, as residential subscribers have increasingly moved away from its platform. This trend has added pressure on Viasat to maintain and grow its other service offerings, even as it faces heightened competition in the rapidly evolving communications industry.
The combination of these factors—large-scale share sales by major investors, the resulting stock price decline, and ongoing challenges in key business segments—paints a complex picture for Viasat as it moves forward. Investors will be closely watching the company’s next steps and any further communications from management to gauge the potential long-term effects of these developments on Viasat’s market position and financial health.
