Why Shares of Globalstar Surged Today

What happened

Shares of mobile satellite services provider Globalstar (NYSEMKT: GSAT  ) jumped on Monday following news that Straight Path Communications (NYSEMKT: STRP  ) may be the subject of a bidding war between AT&T and Verizon. At 3:45 p.m. EDT, Globalstar stock was up about 11%, while Straight Path's was up 22%.

So what

AT&T announced on April 10 that it had agreed to acquire Straight Path in an effort to support development of 5G technologies. Straight Path owns a nationwide portfolio of millimeter wave spectrum, valuable to AT&T in an increasingly competitive wireless market. AT&T planned to pay $1.25 billion for Straight Path, or $1.6 billion inclusive of liabilities.

Shares of Globalstar, which recently received approval from the Federal Communications Commission to build a low-power terrestrial network with some of its satellite spectrum, rose following that news. Verizon is now reportedly considering topping AT&T's bid, starting what could end up being a bidding war between the two top wireless companies in the U.S.

The Globalstar Sat-Fi device.

Image source: Globalstar.

This prospect sent shares of Globalstar even higher. There have been no reports that Globalstar is an acquisition target, but investors are betting that a buyout is now more likely.

Now what

Globalstar is a volatile stock that has dropped significantly since peaking in 2014. While a major rebound since late 2016, driven by the FCC approval, has undone some of that decline, Globalstar remains a risky investment, to say the least.

With the wireless industry getting more competitive, it's possible that Globalstar will become an acquisition target. But at the moment, that's pure speculation.

10 stocks we like better than Globalstar
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Globalstar wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of April 3, 2017

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 4014251, ~/Articles/ArticleHandler.aspx, 4/29/2017 1:23:50 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 4 hours ago Sponsored by:
Change down DOW 20940.5 -40.8 -0.2%
Change down S&P 500 2384.2 -4.6 -0.2%
Change down NASD 6047.6 -1.3 0.0%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

4/28/2017 4:00 PM
GSAT $1.91 Down -0.03 -1.55%
Globalstar CAPS Rating: **
STRP $128.86 Down -2.65 -2.02%
Straight Path Comm… CAPS Rating: No stars

Article registration testing

Revisit this page

Clear article's cache and revisit this page

Or, visit the current page, forcing Test ID to article:interrupt:106919 and

Tookie Value = 60224094596786952836606925061527