Canadian satellite broadband company Telesat debuts on the Nasdaq, adding another space pure play

Canadian satellite communications company Telesat went public Friday on the Nasdaq, bringing another space pure-play stock to the market.

“We’re an established operator, with an established business, generating a significant amount of cash flow today with our existing customers, who were always quite forward thinking about where this market’s going,” Telesat CEO Dan Goldberg told CNBC.

Telesat shares priced at $41.52 and surged as much as 16% in early trading, before giving up most of the gains to trade largely unchanged.

The listing came following an exchange with Telesat’s shareholders, with the company effectively taking the place of formerly public Loral Space & Communications. Before the transaction, Telesat’s shareholders were Loral and Canadian pension fund PSP, which owned 64% and 36% of Telesat stock, respectively.

“We didn’t issue any new equity at this point – this was really just about rationalizing the ownership structure,” Goldberg said. “It’s cleaner.”

Telesat’s core growth project is the low Earth orbit broadband satellite network it’s building, called Lightspeed. Unlike the consumer focus of SpaceX’s Starlink constellation, Telesat plans to use its 298 Lightspeed satellites to provide high-speed fiber-like internet to business-to-business, or enterprise, customers around the world.

Goldberg emphasized that “Lightspeed is capital intensive,” with the company expecting it to cost $5 billion.

Telesat has lined up more than $3 billion in financing for Lightspeed so far, including a $1.1 billion investment from the Canadian government. The company will raise the remaining needed funding from export credit agencies, Goldberg said, with Telesat “in the process of finishing those discussions.”

The company launched an experimental low Earth orbit satellite in 2018, which Goldberg said was used for customer demonstrations and technology validation.

Telesat contracted French-Italian space hardware manufacturer Thales Alenia Space to build the satellites. The company does not yet have a specific target date for the first Lightspeed launches, with Goldberg noting that “Thales has had a few supply chain issues” that caused delays.