Tuesday, May 05, 2009

DigitalGlobe (DGI) IPO in mid-May Should help GEOY

Following my earlier post this morning on how GeoEye (GEOY) was started at a "buy" at Canaccord Adams, a reader pointed out to me that GEOY's duopolistic partner DigitalGlobe (DGI) finally announced yesterday that it will go public in mid-May.

DGI filed its S-1 to go public a year ago, but it hasn't been able to because of the general markets. It will be only the 5th IPO this year.

DGI's IPO is a positive for GEOY and -- I don't believe -- is yet reflected in the GEOY stock price. GeoEye has done a poor job communicating its strong story but, as a small company, it's been at a disadvantage getting people to pay attention. With increased analyst coverage, as we see today, plus future earnings calls and DGI's IPO in a couple of weeks, there will be a lot more attention given to this industry of satellite imagery and GEOY.

I bought some June out-of-the-money calls this morning, as I expect the good news of May to be reflected in the stock.

Position: Long GEOY

Originally published in RealMoney.com on 4/30/2009 11:35 AM EDT

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