Iridium Shares Up 27% on Restructuring Hints

Shares of Iridium World Communications Ltd., which operates the first global satellite telephone network, rose 27%, extending a recent rally driven by hints that it may announce a financial restructuring that will be more positive than originally thought. Iridium shares rose $2.75 to close at $13.06 in heavy trading on Nasdaq. The stock has risen about 57% this week and 97% in the last seven trading sessions. A year ago, it traded at $54.63. Iridium, which is 18%-owned by Motorola Inc., has a week to meet the terms of $800 million in bank loans, a deadline that was extended 30 days. Last week, a Motorola official said he expects “significant” developments to occur at the cash-strapped company by the end of the month. Iridium wasn’t immediately available to comment. On Monday, the company told analysts that it sees “a fairly positive” announcement on the restructuring by the end of the month or early July. Along with expectations for a better-than-expected restructuring, the rally was helped by investors’ scrambling to cover “short” sales, which account for a large segment of Iridium shares outstanding, analysts said. People who short stock hope to repurchase the shares later at a lower price, pocket the price difference and return them to the lender.