Globalstar's stock surged over 15% in extended trading on Wednesday after the Financial Times reported that Amazon is in talks to acquire the satellite communications company.
Acquisition Negotiations and Complexities
- The report, citing people familiar with the matter, indicates that lengthy discussions are ongoing, with some deal complexities still being negotiated.
- A key complicating factor is Apple's 20% stake in Globalstar, acquired in 2024 through a $1.5 billion investment to boost the company's satellite constellation and ground infrastructure.
- Amazon declined to comment, and Globalstar did not immediately respond to a request for comment.
Amazon's Leo Satellite Internet Service
- Amazon's Project Kuiper, branded as Amazon Leo, aims to deliver internet from space.
- The company has launched approximately 200 satellites in low Earth orbit since April 2023 and targets commercial service rollout later in 2024.
- Amazon plans a full constellation of about 7,700 satellites but has faced delays; in January 2024, it requested an extension from the FCC to meet a deadline of launching roughly 1,600 satellites by July 2026.
Competitive Landscape and Prior Reports
- Amazon is vying to compete with SpaceX's Starlink, which has deployed over 10,000 satellites and serves more than 9 million users globally.
- Bloomberg reported in October 2023 that Globalstar was exploring a potential sale and held early discussions with SpaceX regarding a transaction.