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What:Shares of Gogo Inc. were up 16.2% as of 2:30 p.m. EDT Thursday after the in-flight entertainment specialist revealed in an SEC filing it had received a "proposal from a major airline customer."
So what:More specifically, under the proposal, GoGo says it "would provide connectivity service on a meaningful portion of the airline's domestic fleet that it currently serves, using the company's ATG, ATG-4 and 2Ku technologies."
Recall that Gogo commenced flight testing late last year on 2Ku, its next-generation global connectivity solution that can uniquely provide real-time streaming and live TV programming. At the time, according to Gogo CEO Michael Small, eight airlines had already selected 2Ku since it was first announced in 2014.
Now what: This particular positive development proved enough for Gogo to also announce it intendsnotto proceed with its offering of $525 million in aggregate principle of 12% senior secured notes due in 2020 -- which was originally slated to close today and would have served to repay existing debt and provide working capital -- "pending further negotiation of the proposal."
To be clear, that also means this proposal is not guaranteed to evolve into a full-fledged deal. But with shares of Gogo still down 37% year to date, and given the prospect of a lucrative new agreement to be reached, it's no surprise to see Gogo stock trading significantly higher today.
The article Why Gogo, Inc. Stock Skyrocketed Today originally appeared on Fool.com.
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