What: Shares of satellite communications company Newsat Limited (ASX: NWT) fell by as much as 39.3% to just 9.1 cents today following a disappointing earnings report, which it released on Friday after the market's close.
So What: Newsat has been in and out of the media for all the wrong reasons recently. To begin with, the launch of its Jabiru-1 satellite has been repeatedly postponed and is now delayed until early 2016. Meanwhile, the company finds itself in a net current liability position of $300 million with serious problems unless it can renegotiate hundreds of millions of dollars in loans in the near future.
Investors have also been concerned about the behaviour of some of the company's executives. As reported by the Fairfax press, the company's senior executives ran up a $1 million travel bill which included flying in first-class and enjoying $10,000 dinners. That's hardly the way you want your hard-earned money being spent.
Now What: Newsat has developed a reputation amongst investors which will be extremely hard to shake off. Considering the combination of a questionable internal environment and debt piling up, investors may want to sell their stock and gain exposure to some of Australia's more promising tech stocks.
