Gogo Inc. (GOGO​) shares fell more than 5.5% on Thursday, which extended a decline that began on Tuesday. Over that time frame, shares have fallen more than 12% following a new $100 million senior debt offering that matures in 2022 with a 12.5% interest rate. The debt will be used to help finance the commercial rollout of the company's next-generation global satellite solution 2Ku along with general corporate purposes.

Some investors have expressed concern over Gogo's growing level of debt, which now amounts to about $801 million. Last quarter, the company reported a wider-than-expected second quarter loss of $44.2 million, driven by increasing costs for launching 2Ku as well as original equipment manufacturer (OEM) 2Ku programs and costs associated with its air-to-ground (ATG) solution. EBITDA also fell 31% to $9.9 million, but service revenue increased 20.8% thanks to international orders. (See also: Gogo Q2 Loss Wider Than Expected, Revenues Top.)

Technical chart showing the performance of Gogo Inc. (GOGO) stock

From a technical standpoint, the stock broke down from key trendline support earlier this month before moving below the pivot point at $13.29 and S1 support at $12.52. The relative strength index (RSI) responded by moving near oversold territory at 31.69, but the moving average convergence divergence (MACD) experienced a bearish crossover that could signal the start of a longer-term bearish downtrend.

Traders should watch for a rebound from S1 support levels toward pivot point levels at $13.29 on the upside or a continued breakdown to the 200-day moving average at $11.47 or S2 support at $11.04 on the downside. Technical indicators appear to support a bearish case over the intermediate term, but the significant decline over the past few sessions suggests that there could be some near-term consolidation before more downside. (For more, see: Gogo Shares Down Despite Air France Deal.)

Chart courtesy of StockCharts.com. The author holds no position in the stock(s) mentioned except through passively managed index funds.

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