Under the deal, GlobalStar’s planned services will include a new satellite constellation, expanded ground infrastructure, and increased global mobile services licensing.
Shares of telecom infrastructure services provider GlobalStar ($GSAT) soared as much as 37% on Friday as of 3:26 pm ET after the company announced an $1.5 billion investment deal from Apple to develop and launch a new mobile satellite services network, lifting retail sentiment.
Under the deal, GlobalStar’s planned services will include a new satellite constellation, expanded ground infrastructure, and increased global mobile services licensing. Apple will prepay up to $1.1 billion for certain services and also invest $400 million for a 20% stake in the company. GlobalStar could buy back the sold shares under certain conditions. The Covington, La.-based GlobalStar plans to use a portion of the funds to pay down debt.
The partnership is the latest “direct-to-device” play in the satellite connectivity market, providing services to smartphones and other devices from space. Other players include projects from SpaceX, AST SpaceMobile, and Lynk.
Retail sentiment on the stock turned ‘extremely bullish’ (96/100) from ‘bullish’ (64/100) a day ago. While message volumes climbed into the ‘extremely high’ (97/100) zone from ‘high’(55/100).
Globalstar is set to release its third quarter financial and operating results on Thursday, November 7, 2024 after the market closes.
Stocktwits users were optimistic about the funding’s significance for its long-term pricing prospects.
Morgan Stanley analyst Simon Flannery was also reportedly upbeat about the move, terming it “very encouraging,” The Fly.com reported.
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