A recently launched Sirius XM satellite suffered “failures” during preliminary testing in space, the company noted in a securities filing on Wednesday, although it did not disclose the cause of the malfunction.
“During in-orbit testing of SXM-7, events occurred which have caused failures of certain SXM-7 payload units. An evaluation of SXM-7 is underway. The full extent of the damage to SXM-7 is not yet known,” Sirius XM said in the filing.
Maxar Technologies built the satellite, which SpaceX then launched in December. A Sirius XM spokesperson told CNBC that the cause of the failure was not related to the SpaceX launch of the satellite, and noted that Sirius XM is able to communicate with and maintain control of the satellite.
Sirius XM declined to comment on whether it believed SXM-7 will be recoverable.
“SXM-7 was intended to supplement the existing fleet of SiriusXM satellites,” Sirius XM said in a statement. “Construction of our SXM-8 satellite is underway and that satellite is expected to be launched into a geostationary orbit later this year.”
Shares of Sirius XM had climbed as much as 24% earlier in the day but then gave up most of its gains, up about 7% in midday trading, while Maxar’s stock fell as much as 8% from its previous close.
Maxar and SpaceX declined CNBC’s requests for comment.
SpaceX launched the SXM-7 satellite on a Falcon 9 rocket, with Sirius-XM beginning in-orbit testing of the satellite on Jan. 4. The company said that it does not expect its current satellite radio service will be impacted, with its XM-3 and XM-4 satellites operating normally and its XM-5 satellite is standing by in orbit as a spare.
Maxar said in its own filing on Wednesday that it is assisting Sirius XM “in troubleshooting and diagnosing the situation to evaluate the extent of the damage to the SXM-7 satellite.”
Sirius XM noted that it has $225 million in aggregate insurance for SXM-7, which covers the satellite through launch and in its first year of operation in space.
“We have notified the underwriters of these policies of a potential claim with respect to SXM-7,” Sirius XM said.
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