Monday, January 28, 2019

Maxar's Theme Music for its Newly Scheduled AGM on May 8th, 2019 Should be the Theme to the Benny Hill Show

          By Chuck Black

Stand by for thrills, chills, spills and comedy! Westminster CO based Maxar Technologies has announced the date, time and location for its 2019 annual general meeting (AGM).

The theme for the meeting, although officially unstated, might logically be "Yakety Sax," an instrumental jointly composed by James Q. "Spider" Rich and Boots Randolph in the 1960's, which later gained fame as the theme song for the Benny Hill Show.

The program, a skit based British based comedy program which ran from 1969 - 1989, often used the tune for background during scenes where people ran around confused and at high speeds.

The confusing component of the Maxar AGM is the part where 90% of Maxar stock value essentially disappeared over the last year. Shareholders are expected to run around at high speeds during the AGM in an attempt to either regenerate the missing stock value or find someone else to blame for the loss.

Just like the Benny Hill show.

As outlined in the January 28th, 2019 Maxar press release, "Maxar Technologies Announces Date of Annual Meeting of Stockholders," the AGM will be held on Wednesday, May 8th, 2019, at 2:00 pm local time, at Maxar headquarters in Westminster, Colorado. 

According to the press release:
Stockholders as of the record date, close of business on March 20, 2019, will be entitled to vote at the meeting. This will be Maxar's first annual meeting of shareholders as a Delaware corporation following its US domestication (or reincorporation as a US based company) on January 1, 2019...
Of course, the May 2019 meeting date is also a substantial delay after Maxar's last earnings report which, as outlined in the October 31st, 2018 Maxar press release, "Maxar Technologies Reports Third Quarter 2018 Results, Declares Quarterly Dividend," occurred back in October 2018.

Despite the title of the press release, the third quarter 2018 was essentially a fiscal disaster which, as outlined in the November 1st, 2018 post, "Maxar Technologies Share Price Collapses After Q3 Earnings Report Released," noted revenue shortfalls and a high debt load, which both contributed to Maxars stock collapse.

As noted in the January 23rd, 2019 Globe and Mail post, "Why Maxar shareholders found it hard to sell during the stock’s big plunge," Canadian holders of Maxar stock have their own, unique and special reason to be confused and run around at high speeds during the AGM.

According to the post, Maxar’s Canadian stockholders were essentially unable to unload their shares during a two day period in January 2019, when Maxar shares traded on the Toronto Stock Exchange (TSE) lost almost 50% of their share value.

Of course, if one wanted a more serious take on the proceedings, it could be noted that one of the big problems is the worldwide slowdown in new geostationary (GEO) and medium Earth orbit (MEO) comsat contracts since 2000. The slowdown has hit Maxar subsidiary, the Palo Alto CA SSL especially hard since SSL traditionally  focused on the high profit GEO and MEO manufacturing market. In 2000, forty preliminary orders were placed for GEO and MEO satellites (five through SSL) and twenty-seven of those orders were eventually fulfilled (four through SSL). In 2018, only thirteen orders were placed for GEO and MEO comsats (two through SSL) and ten are still on track for completion (one through SSL). Graphic c/o Gunters Space Page.

Maxar executives will also need to worry about an increasing number of lawsuits from disgruntled investors.

As outlined in the January 17th, 2019 post, "Maxar Technologies Hit With Class Action Lawsuit Over "False and Misleading Statements." More Lawsuits On the Way," the various suits will likely claim "materially false and misleading statements regarding the Company’s business, operational and compliance policies (during the period from March 29th, 2018 through January 7th, 2019)" and will seek damages as a result of those statements. It's quite likely that some of those items will also be discussed during the AGM.

As well, the question of whatever happened to an existing proposal from Maxar executives to sell portions or all of Palo Alto CA based SSL (a Maxar subsidiary) in order to raise funding to pay down the Maxar debt load could also be addressed.

Originally, an announcement on that matter was supposed to be made before the end of 2018. Since nothing has been announced, except for the sale of property owned in Palo Alto by SSL (as outlined in the December 6th, 2018 Space News post, "Maxar sells portion of SSL real estate"). It's a fair bet that Maxar executives weren't able to sell much more than the real estate, which is why they never brought up the idea again,

Perhaps the next quarterly report, which Maxar originally promised sometime in February 2019. will be better and shed some light on the above listed issues. Or maybe not.

Either way, the result will likely encourage more confused running around at high speed by Maxar executives over the next few months.

As Benny Hill used to say, "Do unto others, then run."
Chuck Black.

Chuck Black is the editor of the Commercial Space blog. 

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