Why Gogo's Stock Is Soaring Today
What happened
Shares of in-flight networking specialist Gogo (NASDAQ: GOGO) soared on Thursday, rising as much as 17.1% on the announcement of a new satellite broadband contract. By 12:20 p.m. EST, the stock had retreated to a milder gain of 12%.
So what
Gogo is leasing several gigahertz' worth of
"Through our partnership with Hispasat, Gogo 2Ku will continue to meet the growing demand for high-speed inflight connectivity," said Gogo CEO Oakleigh Thorne in a prepared statement.
Now what
The mere fact that Gogo is investing in additional satellite-based network capacity is proof that its services are in high demand. Investors are essentially applauding
Hispasat's parent company, the Madrid-based electric utility giant Red Electrica Group, rose just 1.2% on the news. A single networking deal with a small-cap service provider like Gogo barely moves the needle for an industry titan with a $10.6 billion market cap and $2.2 billion of annual revenues.
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