Why Is IRDM Stock Rising Premarket Today?

• At its annual meeting, Iridium Communications approved an updated employee equity plan.
• The revised 2015 Equity Incentive Plan allows up to 42.9 million shares for future stock-based compensation awards. 
• Investors also voted to return all 11 board nominees for terms running through the company’s 2027 annual meeting. 

Iridium Communications (IRDM) stock gained premarket on Thursday after a series of moves strengthened its position in aviation and satellite communications, including shareholder approval of a revised compensation structure, dividend plan, and progress toward acquiring air traffic surveillance company Aireon.

Iridium Communications’ stock traded nearly 2% higher in Thursday’s premarket. 

IRDM’s Shareholders’ Meeting Results

At its annual shareholders' meeting on Wednesday, Iridium Communications secured approval for a revised employee equity compensation program and announced a quarterly cash dividend.

The revised 2015 Equity Incentive Plan authorizes the issuance of up to 42.9 million shares of common stock for future grants tied to stock options and other equity-based compensation arrangements. 

Shareholders also reelected all 11 director nominees to serve until the company’s 2027 annual meeting. Iridium’s board declared a quarterly cash dividend of $0.15 per share. The payment is scheduled for June 30 and will go to shareholders on record as of June 15.

IRDM’s Aireon Acquisition Bet 

The governance updates arrive shortly after Iridium announced a deal to purchase the remaining 61% stake in Aireon LLC last week, for roughly $366.7 million in cash, while also taking on about $155 million in debt obligations.

Aireon operates a global flight-tracking system used by aviation regulators and air traffic agencies. Its technology already works through equipment connected to Iridium’s satellites, which will give Iridium greater control of the aviation data network after the deal closes. 

During its fiscal first-quarter earnings last month, Iridium reported continued growth in commercial Internet of Things users, with total billable subscribers rising to more than 2.5 million.

It also indicated the Aireon acquisition is expected to contribute approximately $100 million in annual revenue and roughly $30 million in operational EBITDA after the transaction closes, which is anticipated during the third quarter.

What IRDM Retail Traders Are Saying 

On Stocktwits, retail sentiment around the stock jumped to ‘bullish’ from ‘bearish’ territory the previous day, with a 1,300% surge in message volume over 24 hours. 

A user said, “Started a small position here and will DCA. I like this stock. It has locked-in recurring revenue, proven profitability, a major moat, and even a dividend. Now that’s juicy.”

Another user said, “Iridium is actively experimenting with new small-sat communication capabilities.”

IRDM stock has surged over 160% year-to-date. 

Also See: Lowe’s Keeps Outlook Intact, Yet Analysts Trim Targets On Profit Pressure Concerns

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