Key Highlights
- Shares of Globalstar rose more than 15% during extended trading hours after the Financial Times disclosed that Amazon is negotiating to purchase the satellite communications provider.
- Discussions between the companies continue, with several deal complexities still requiring resolution despite extended negotiations.
- Apple holds a 20% ownership position in Globalstar following a $1.5 billion investment made in 2024, which presents significant complications for any acquisition.
- An acquisition would bolster Amazon Leo, the company’s satellite internet initiative, which has deployed approximately 200 satellites since launching operations in April of last year.
- Bloomberg previously disclosed in October that Globalstar had been considering a sale, with preliminary discussions involving SpaceX.
Globalstar (GSAT) began trading approximately 12% higher on the news, with extended-hours gains exceeding 15%. Amazon (AMZN) declined 2.38% in after-hours trading.
Amazon declined to provide commentary. Globalstar representatives did not immediately respond to inquiries.
The Financial Times published the report, referencing sources with knowledge of the matter. According to the publication, both companies have engaged in discussions over an extended period while working to address multiple deal complexities.
Among the complications stands Apple’s substantial investment in Globalstar. Apple secured a 20% ownership stake in the company during 2024 through a $1.5 billion capital injection. The investment aimed to expand Globalstar’s satellite network and ground-based systems. Any acquisition by Amazon would need to address this existing strategic partnership.
Amazon’s Satellite Internet Expansion
Amazon has been developing its proprietary satellite internet platform, known as Amazon Leo. Beginning in April of last year, the company has placed roughly 200 satellites into low Earth orbit, with plans to begin commercial operations later this year.
The complete vision includes a constellation totaling around 7,700 satellites. Progress has encountered some obstacles. During January, Amazon petitioned the Federal Communications Commission for an extension on a deadline requiring the deployment of approximately 1,600 satellites by July 2026.
Purchasing Globalstar could provide Amazon with substantial advantages through access to established satellite infrastructure and spectrum licenses, helping the company narrow the competitive distance with SpaceX.
SpaceX’s Starlink leads the satellite internet market, operating more than 10,000 satellites in orbit while serving over 9 million subscribers. Amazon currently trails considerably, and a transaction of this nature would likely speed up its development schedule.
Globalstar Previously Pursued Sale Options
Acquisition discussions involving Globalstar have surfaced before. Bloomberg disclosed in October that the company was evaluating a possible sale, including preliminary conversations with Elon Musk’s SpaceX.
Those discussions did not result in a transaction. The current negotiations with Amazon appear to have progressed further, though no agreement has been finalized.
Globalstar delivers satellite-based voice and data communications services and has gained consumer recognition through its collaboration with Apple, which utilizes the company’s network infrastructure for the Emergency SOS via satellite functionality on iPhones.
The Apple partnership adds complexity beyond a standard acquisition. Amazon would be purchasing a company where one of its primary technology competitors maintains a 20% ownership position.
Currently, both parties remain engaged in negotiations. The Financial Times indicated that while discussions have been ongoing for a substantial period, several complications require resolution before finalizing any agreement.
