Summary
Globalstar Inc (NASDAQ:GSAT) shares rose strongly in after-hours trading on Wednesday following a media report that Amazon.com Inc (NASDAQ:AMZN) is in talks to acquire the satellite telecommunications company. The stock climbed about 16% to $79.70, marking the highest traded level since early 2008.
What was reported
The report said Amazon is negotiating to take over Globalstar, in an apparent move to expand its low Earth orbit satellite capability and compete with SpaceX’s Starlink unit. The discussions were described as ongoing, with negotiators still working through the complexities any deal would present.
Key complications cited
One factor identified as complicating the talks is that Apple Inc (NASDAQ:AAPL) owns a 20% stake in Globalstar. That holding means any acquisition would require interaction between Amazon and Apple as part of the negotiation process.
Recent market performance
Globalstar’s share price has appreciated sharply over the past year, rising roughly 230% in the last 12 months amid speculation that the company could be of interest to potential acquirers because of its position as a potential competitor to Starlink. The company received a $1.5 billion investment from Apple in 2024.
Broader context included in the report
The same report noted Amazon’s ongoing satellite effort, known as Project Leo, with more than 180 satellites currently in orbit. By comparison, SpaceX operates a much larger fleet, cited as numbering more than 10,000 satellites.
What remains uncertain
According to the reporting, the parties were still negotiating and the outcome of those talks was uncertain. The existence of Apple’s significant stake and the negotiation complexity were highlighted as immediate sources of uncertainty around any potential transaction.
Top-line takeaways
- Globalstar rallied to its highest price since early 2008 after reports Amazon is in takeover talks.
- Apple’s 20% stake in Globalstar was described as a complicating element in any potential deal.
- Amazon’s satellite fleet is over 180 satellites, while SpaceX’s Starlink was reported as having a fleet in excess of 10,000 satellites.