TLDR
- Shares of Globalstar soared more than 15% during after-hours trading after the Financial Times disclosed that Amazon is negotiating to purchase the satellite communications operator.
- Discussions between the two corporations are continuing, although certain transaction challenges remain unresolved despite extended negotiations.
- One major complication involves Apple’s 20% ownership position in Globalstar — secured through a $1.5 billion capital injection in 2024.
- The prospective takeover would strengthen Amazon Leo, the company’s emerging satellite internet venture, which has deployed approximately 200 satellites since last April.
- Earlier reporting by Bloomberg in October revealed that Globalstar was considering strategic alternatives, including preliminary discussions with SpaceX.
Globalstar (GSAT) began trading up roughly 12% following the news, with after-hours increases surpassing 15%. Amazon (AMZN) declined 2.38% during extended trading hours.
Amazon refused to provide comment. Globalstar representatives did not immediately return requests seeking comment.
The Financial Times published the original report, referencing sources with knowledge of the discussions. According to the publication, both parties have been engaged in negotiations for an extended period but continue addressing multiple transaction hurdles.
Among these obstacles is Apple’s substantial stake in Globalstar. Apple acquired a 20% equity position in the satellite provider during 2024 through a $1.5 billion investment package. The agreement was designed to enhance Globalstar’s orbital network and terrestrial support systems. Any potential Amazon takeover would necessitate addressing this pre-existing partnership.
Amazon’s Push Into Low Earth Orbit
Amazon has been developing its proprietary satellite internet platform, branded Amazon Leo. Since April of last year, the tech giant has deployed approximately 200 satellites into low Earth orbit and plans to commence commercial operations later this year.
The comprehensive strategy calls for a network comprising roughly 7,700 satellites. However, the initiative has encountered certain setbacks. This past January, Amazon petitioned the Federal Communications Commission for an extension on a regulatory requirement mandating the launch of about 1,600 satellites by July 2026.
Purchasing Globalstar could provide Amazon with substantial advantages — including established satellite assets and valuable spectrum licenses — as the company attempts to narrow the competitive distance with SpaceX.
SpaceX’s Starlink currently dominates the satellite broadband sector, operating more than 10,000 satellites in orbit and serving over 9 million customers. Amazon trails considerably at present, and a transaction of this magnitude would probably expedite its development roadmap.
Globalstar Had Already Been Exploring a Sale
This marks not the first occasion Globalstar has been mentioned in takeover speculation. Bloomberg disclosed in October that the satellite operator was evaluating strategic options, including preliminary conversations with Elon Musk’s SpaceX.
Those discussions ultimately stalled. The ongoing negotiations with Amazon seem to have progressed further, though no definitive agreement has been finalized.
Globalstar delivers satellite-enabled voice and data communications and is likely most recognized by consumer markets through its collaboration with Apple, which leverages the company’s infrastructure to enable the Emergency SOS via satellite capability on iPhones.
This Apple partnership adds considerable complexity to any potential transaction. Amazon would essentially be purchasing a business in which one of its primary technology competitors maintains a 20% ownership interest.
Currently, both companies remain engaged in negotiations. The Financial Times reported that although discussions have been protracted, several significant complexities require resolution before any transaction can be completed.
