What happened

Shares of mobile satellite services provider Globalstar (GSAT -0.79%) 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.