Unfortunately for its shareholders, the SKY and Space Global Ltd (ASX: SAS) share price has been amongst the worst performers on the local market today.
In late morning trade its shares are down 14% to 21 cents.
What happened?
Today's sell-off has happened despite positive news out of the communications infrastructure company this morning.
Following on from the successful launch into space of its 3 Diamonds nano-satellites on Friday, this morning management announced that its satellites are well-positioned in orbit and functioning according to plan.
According to the release, during the weekend, communication with the satellites was successful in every pass. All system parameters are reportedly within the expected range with no anomalies.
But with its shares up over 160% since the turn of the year, I suspect today's decline may be the result of profit-taking from investors.
Should you buy the dip?
I think Sky and Space Global is an exciting company and could have an extremely bright future ahead of it.
Especially if the revenue estimates that management has made prove to be accurate. Management has suggested that a full Equatorial constellation of 200 of its nano-satellites has the potential to generate between US$600 million and US$1 billion in annual revenues.
But until the full constellation is in position and generating revenues, I'm going to watch on from the sidelines with a keen interest and focus on traditional telco companies such as Telstra Corporation Ltd (ASX: TLS) and TPG Telecom Ltd (ASX: TPM) instead.
