American Mobile Satellite Corp. announced it raised $125 million through a public offering of 7 million shares of common stock.
Half the proceeds will be used to pay down debt, while the other half will be used for general business purposes, the company said.
The successful offering, as well as the launch of several new services, has attracted increased interest in the company, which offers wireless data services over its geostationary satellite network and Ardis terrestrial packet data network.
SoundView Financial Group recently initiated coverage on AMSC with a Buy rating and a year-end target price of $32.
“The company has successfully repositioned itself as a leader in the new, potentially explosive market of wireless data,” stated the SoundView report. AMSC and SkyTel Communications Inc. have teamed to offer the e-Link two-way wireless messaging product, which uses the Inter@ctive 850 pager from Research In Motion Ltd. SoundView also pointed to AMSC’s larger customer accounts, such as United Parcel Service, Sears, IBM Corp. and Lucent Technologies Inc.
Credit Suisse First Boston also initiated coverage on the company, with a Buy rating as well, but with a year-end price target of $30.
AMSC’s stock price, however, is at a two-month low-$16.87 at press time.
The company released second-quarter earnings last month with a net loss of $42.4 million, or $1.31 a share, compared with a net loss of $39 million, or $1.23 per share, for the same period last year. AMSC said the loss reflects equity losses related to building its XM Satellite Radio service.
AMSC recently bought out partner Worldspace Inc. to fully control the XM Satellite Radio venture.
