Here’s the CNBC segment with Paul Jacobs for which he caught a lot of flak for being “clueless” and “secretive”- but think about it, Apple isn’t going to let this guy leak their secret plans. Apple themselves will be the ones to change the world with revolutionary products, not some penny stock CEO… scroll down for the complete investor day presentation.
UPDATE (11/26/24): We ended up selling 1/5 of our position for a 73% gain. GSAT is still half of our trading portfolio at the moment.
UPDATE: Globalstar announced their desire to enact a reverse split and up-list to the NASDAQ exchange. While reverse splits usually have a negative connotation (as companies are required to keep their share price above 1.00, if they cannot do it organically, they reverse-split their shares to multiply the share price), Globalstar wants to reduce their number of outstanding shares and attract institutional investors who are prohibited from buying companies with shares priced under 5.00. We are looking for more clarity on the matter during their investor day on December 12.
NOV 1: Today it was announced that Apple has agreed to further advance their partnership with satellite services provider Globalstar. The amended agreement grants up to $1.5B to Globalstar to strengthen and maintain their LEO satellite constellation that is currently supporting Apple’s Emergency SOS service for the iPhone.
Furthermore, part of the investment will give Apple a 20% ownership of Globalstar’s total equity. (EDIT (11/26/24): Globalstar and Apple created a SPE- Special Purpose Entity- of which Apple bought 20% of the equity. Apple DID NOT buy 20% of GSAT’s open market shares.) With most of Globalstar’s bandwidth already allotted to Apple (as per original agreement), this brings Apple one step closer to total ownership/absorption of GSAT and their assets- including the coveted n53 band of wireless spectrum.
“These investments will back the creation and deployment of a new satellite constellation and the expansion of ground infrastructure, all of which will be owned and managed by GlobalStar.
Under the terms of the deal, Apple will make upfront payments for services, while GlobalStar retains all revenue from both terrestrial and satellite services and dedicates 85% of its network capacity to Apple.
GlobalStar projects that its total annual revenue will more than double compared to 2024 annualized levels during the first full year following the launch of the expanded satellite services.” (link)
Bunnyhop Capital has been trading this name for a number of years but has recently taken a core long position of common shares. At the time of writing, GSAT comprises a total of 60% of the portfolio, signaling a potential YOLO-ing of the stock and calls for a re-balancing.
Globalstar will announce Q3 earnings on Thursday afternoon. With a few upcoming catalysts (Mexico spectrum approval, new DOD contracts) things are looking up. Shareholders would love to see a share buyback program enacted, since the OS count is just under 2 billion- a ridiculous amount of shares. One sign of hope is the massive amount of insider buying we saw earlier this year, with Director James Lynch purchasing ~4.5M shares off the open market.
Looking at the chart, we recently saw a strong bounce off historical support and psych level 1.00 with the today seeing the highest volume since September of 2021. We can expect to get a break of 2.00 next week with continuation (or not) based on whether the earnings and guidance fall in line with current projections.
Push It A Stop 