What Happened?
Shares of satellite communications provider Globalstar (NASDAQ: GSAT) jumped 4.8% in the afternoon session after a major deal was announced by a peer company.
DISH TV operator EchoStar announced it was selling low- and mid-band spectrum allocations to AT&T for a substantial $23 billion. While the news does not directly involve Globalstar, such a large transaction for spectrum assets often generates positive momentum for other companies in the industry that hold similar assets. Investors may be speculating that the high valuation placed on EchoStar's spectrum highlights the potential unrealized value of Globalstar's own spectrum portfolio, leading to increased buying interest in the stock.
After the initial pop the shares cooled down to $28.01, up 4.8% from previous close.
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What Is The Market Telling Us
Globalstar’s shares are extremely volatile and have had 39 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 4 days ago when the stock gained 4% on the news that the major indices rebounded, as Fed Chair Jerome Powell delivered dovish remarks at the much-awaited Jackson Hole symposium.
Powell suggested that with inflation risks moderating and unemployment remaining low, the Federal Reserve might consider a shift in its monetary policy stance, including potential interest rate cuts. This outlook eased market concerns about prolonged high interest rates and their impact on economic growth. The prospect of lower borrowing costs bolstered investor confidence, particularly in sectors that have lagged, leading to a broad rally across the market.
Globalstar is down 11.9% since the beginning of the year, and at $28.01 per share, it is trading 18.5% below its 52-week high of $34.35 from December 2024. Investors who bought $1,000 worth of Globalstar’s shares 5 years ago would now be looking at an investment worth $5,556.
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