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L3harris Technologies will acquire its Link 16 business for roughly $1.96 billion

Viasat Inc (NASDAQ:VSAT) is up a whopping 45.1% at $43.85 at last check, after news that defense contractor L3harris Technologies (LHX) will acquire the company’s Link 16 tactical data business for roughly $1.96 billion. The moves comes as Viasat seeks to increase liquidity, with proceeds expected to fund a path to positive free cash flow.

Options traders are already chiming in, albeit amid low absolute volume, with overall options volume running at 10 times the intraday average. Most popular is the October 40 put, followed by the 60 call in the same series, with positions currently being opened at both.

The shares earlier today blasted through overhead pressure at the 40-day moving average, and are now eyeing their best single-day percentage on record. Viasat stock is also trading at its highest level since late April, while chipping away at its 13.6% year-to-date deficit. 

Short interest is up 6.2% in the last two reporting periods, with the 5.38 million shares sold short making up 7.5% of the security’s available float, or nearly three weeks’ worth of pent-up buying power. This means the equity looks ripe for a short squeeze, which could push VSAT even higher.

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By admin