Maxar Technologies Ltd. (TSX:MAXR)(NYSE:MAXR) stock has taken a major hit in early August after being targeted by a short seller. The short seller in question, Spruce Point Capital Management, called into question whether or not Maxar would be able to sustain its current dividend payment going forward.
Right now, Maxar offers a quarterly dividend of $0.37 per share representing a 2.9% dividend yield.
Maxar fired back and reaffirmed its full-year guidance while accusing Spruce Point of releasing the report based purely on its profit motive. Short-selling campaigns have also had an impact on Canadian companies like Shopify Inc. and Tucows Inc. In both cases the stocks rebounded after initial alarm had dissipated.
In late 2017 officials at the Ontario Securities Commission (OSC) stated that they would seek to respond in some way to so-called “short-and-distort” campaigns going forward.
Punitive measures have been threatened, but nothing substantive have been pursued so far. It goes without saying that this would be a difficult policy to enforce in the first place.
Maxar saw its backlog shrink to $3.05 billion at the end of the second quarter compared to $3.32 billion as at December 31, 2017. Revenues did manage to get a boost from its DigitalGlobe Transaction and grew to $578.9 million compared to $375.2 million in the prior year.
Maxar shot up 7.2% on August 9, demonstrating that investors may be starting to jump on this buy-low opportunity.
