Intelsat S.A. Class Action Lawsuit
- Company Name
- Intelsat S.A.
- Stock Symbol
- Class Period
- November 5, 2019 to November 18, 2019
- Northern District of California
The Intelsat S.A. securities class action lawsuit charges two of Intelsat’s controlling shareholders, Silver Lake Group L.L.C. and BC Partners LLP, and two of Intelsat’s directors (who are also partners of BC Partners) with violations of the Securities Exchange Act of 1934 (the “1934 Act”) and seeks to represent purchasers of Intelsat shares contemporaneously with defendants’ unlawful sales between November 5, 2019 and November 18, 2019 (the “Class Period”). The Intelsat securities class action lawsuit was commenced on April 7, 2020 in the Northern District of California and is captioned Hill v. Silver Lake Group, L.L.C., No. 20-cv-02341.
Intelsat, organized as a public limited liability company under the laws of Luxembourg, is a satellite operator that provides television and radio communications. According to Intelsat, it “hold[s] the largest collection of rights to well-placed orbital slots in the most valuable C- and Ku-band spectrums.” Intelsat’s “fleet of 54 geosynchronous satellites” (as of December 31, 2019) covers “more than 99% of the world’s populated regions.”
The Intelsat securities class action lawsuit alleges that defendants violated the 1934 Act by selling a block of Intelsat shares while in possession of material non-public information. Specifically, defendants allegedly knew that Intelsat had met with the Federal Communications Commission (“FCC”) on November 5, 2019 to discuss the private sale of certain wavebands controlled by Intelsat for future “5G” use (the “C-Band”) and that the FCC had opposed Intelsat’s then-existing proposal, favoring a public auction rather than a private sale of the C-Band. On November 18, 2019, after the FCC announced it would publicly auction the C-Band that Intelsat had been hoping to sell privately, Intelsat’s stock price fell over 40%, from a close of $13.41 per share on November 15, 2019 to a close of $8.03 per share on November 18, 2019.
As was later revealed, however, certain insiders sold a large chunk of Intelsat shares just before this massive stock plunge, capitalizing on their knowledge that the FCC viewed Intelsat’s proposals negatively. Notwithstanding Intelsat’s rush to submit a revised proposal, on November 6, 2019, before notice of the meeting was even posted on the FCC’s website (which occurred on November 8, 2019), defendants appear to have sold a block of 10 million Intelsat shares for about $24.60 per share. It was then revealed that the “$246 million block was shopped after markets closed on Nov. 5,” with “no advance warning that the sale was coming,” that pressure was placed on “interested buyers” who “were told they had an hour or so to decide,” and that defendants BC Partners and Silver Lake appear to have been the sellers of those shares. The Intelsat securities class action lawsuit alleges that both BC Partners and Silver Lake had significant control over Intelsat and knew, or were reckless in not knowing, that they were prohibited from trading based on confidential market-moving information, but traded anyway, disposing of their Intelsat stock before this news was announced and the price of Intelsat’s shares plummeted.
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