GSAT stock moved higher in early trading on August 30, 2021, on rumors the new iPhone will connect to low earth orbit satellites.
Apple’s iPhone13 to have ability to use satellite comms, AppleInsider says
The Qualcomm (QCOM) 360 baseband chip that will be featured in Apple’s (AAPL) upcoming iPhone13 model is expected to support low-earth orbit satellite communications, AppleInsider’s Mike Wuerthele writes, citing analyst Ming-Chi Kuo. The analyst states that the use of the chip creates “many potential scenarios for Apple’s business model cooperation with Globalstar (GSAT)”. Source: https://appleinsider.com/articles/21/08/29/iphone-13-will-support-satellite-communications-says-ming-chi-kuo
Apple may use Iridium connectivity ‘down the road,’ says William Blair
MacRumors and more than a dozen other media outlets reported Sunday that a respected Apple (AAPL) analyst believes the next-generation Apple iPhone 13 will use a Qualcomm (QCOM) baseband chip that supports low-earth-orbit satellite communications, a “potential holy grail achievement in the satellite communications industry,” William Blair analyst Louie DiPalma tells investors in a research note. The report stated Globalstar (GSAT) is the most likely satellite communication partner, notes the analyst. DiPalma says that while media coverage is focusing on Globalstar, Iridium Communications (IRDM) has “discreetly dropped hints” that it is pursuing embedding its LEO satellite connectivity into smartphones and other mass market devices. The closest technology that exists to connecting a smartphone directly to a satellite network today is what Iridium does “at scale” by embedding its connectivity into the “very small” form factor Garmin inReach handheld devices, he points out. DiPalma feels Iridium is also the only LEO satellite operator with “truly global coverage.” He believes the Globalstar iPhone 13 reports and a review of past Iridium comments “may cause Iridium shares to trend up by 5% to 15% in the near term.” DiPalma thinks Apple may embed Iridium connectivity in iPhones “down the road” and he keeps an Outperform rating on the shares.
Globalstar Q2 Financials
On August 5, 2021, Globalstar reported Q2 EPS of (1c) versus the two estimate consensus of (1c). The company reported Q2 revenueThe income statement provides a summary of a company's revenue and expenses over a specified period of time, typically a year or a quarter. It shows the company's total revenue, th... of $30.3M versus the one-analyst consensus of $27.36M.
Dave Kagan, Chief Executive Officer of Globalstar, commented, “We are pleased with the improvement of several key performance indicators during the second quarter, including a significant increase in SPOT and Commercial IoT equipment sales, which is a leading indicator of future subscriber activations and service revenue growth. SPOT activations continue at record levels with LTM gross activations up 26% from the prior period, while Commercial IoT ARPU continues to increase driven by higher usage and a favorable rate plan mix. We have executed on our robust sales pipeline while opening up new opportunities that would expand the customer relationships and distribution channels that we currently serve.”
Kagan continued, “Many people in our organization are focused on the blocking and tackling associated with supporting our existing VAR relationships, progressing our product development efforts, and developing our next generation of network assets. These fundamental roles are critical to our success and they have been hitting on all cylinders. However, what will be essential to our ability to meaningfully capitalize on the vast opportunities available to us, particularly in the Commercial IoT space, is identifying, pursuing and closing large deals. One such opportunity in particular is remote monitoring in the alternative energy industry, which has progressed over the last few months with successful field testing. While this opportunity isn’t yet secured, deployments such as this one will expand the use cases and industries that our products can support, which would further reduce the oil and gas concentration that contributed to lower demand during 2020 and provide a more diverse revenue base… We also continue to reduce leverage, and I am happy to report that we have less than $50 million of net first lien principal outstanding and we are working to continue to optimize our balance sheetThe balance sheet is a snapshot of a company's financial position at a specific point in time. It shows the company's assets, liabilities, and equity..”
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GSAT Stock Chart Technical Analysis
GSAT stock popped more than 48% higher on August 30, 2021, on a gap up open. The stock was in a weaking uptrend prior to the Apple rumors. Chasing a stock on a huge gap up based on rumors is a fools errand. Wait three days and see where demand between bulls and bears is established in GSAT stock before considering a new entry IMO.
