gaining 28.57% for the day.The positive price change immediately grabbed the investors’ attention, as recently TSTR used to trade under its yearly average. Since that time, the stock price has moved up by approximately 70%.[BANNER]
Along with the price, traded volume also rose up to over 4 million shares, which is a significant change for the stock as compared to its average volume of 430 thousand shares traded.
As there is no news about TSTR over the last days, we may assume that the sudden stock move is due to an announcement about a new US broadband plan. The plan is to support the wireless industry and would probably affect TSTR. However, it is still to be applied, so nobody can make final conclusions yet.
TerreStar Corp. is in the mobile communications business through its ownership of TerreStar Networks Inc, its principal operating subsidiary, and TerreStar Global Ltd. Historical data shows that TSTR has traded much higher during the last year.
In September, 2009, the stock price went up to $2.75 and traded volume exceeded 12 million shares, though it started to move down a while after that. Following the records, we notice the price has had a few more ups and downs, though it couldn’t move much higher.
TSTR’s first quarter financial results looked positive, though the company has suffered higher expenses and it still has a long-term debt to cover. So, TSTR is considering different alternatives to extend its liquidity and raise more capital.
In its quarterly report, the company claims that: “there is substantial doubt that the available cash balance, investments and available borrowing capacity as of March 31, 2010 will be sufficient to satisfy the projected funding needs for all of 2010”.
Based on this statement, we can assume that though the stock is currently moving up, TSTR is still dependent on finding additional funds to cover its business operations.
