Please ensure Javascript is enabled for purposes of website accessibility

Why Globalstar Stock Soared Higher in February

By Lou Whiteman - Mar 5, 2021 at 2:00PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The communications company is trying to build an audience for its networks.

What happened

Shares of Globalstar (GSAT 0.00%) rocketed 68.6% higher in February, according to data provided by S&P Global Market Intelligence, after the satellite communications company announced a series of developments that might help it to unlock some of the potential value in its assets.

So what

Globalstar operates a constellation of satellites designed for satellite phone and data communications. The company has found it hard to monetize those assets, causing its stock to lose nearly 80% of its value in the three years ending last December.

But so far, 2021 has been a decidedly better story for Globalstar. The stock pushed higher in February after the company announced that Qualcomm (QCOM 0.40%) had included the radio frequencies it owns in its new modems.

A satellite with the Earth behind it.

Image source: Getty Images.

That's important, because it opens up Globalstar's network to a wide range of smartphones, laptops, Internet of Things devices, and other uses.

Or, as Globalstar vice president Kyle Pickens put it in a statement, "Qualcomm's support of Band n53 represents a significant milestone in our efforts to commercialize our spectrum in the U.S. and all other countries where we have or expect to obtain terrestrial authority."

Globalstar followed that later in the month with an announcement of an alliance with wireless-tech company XCOM Labs to make Globalstar's spectrum more powerful.

Now what

These announcements are steps in the right direction, but the company still needs to execute on that potential.

Globalstar shares have spent much of the last three years trading below $1, implying investors had little hope for a recovery. The recent jump is likely more of a reflection that at long last it is at least easier now to make the bull case, but investors should still be cautious as this story continues to play out.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Globalstar Stock Quote
Globalstar
GSAT
$1.22 (0.00%) $0.00
QUALCOMM Incorporated Stock Quote
QUALCOMM Incorporated
QCOM
$132.12 (0.40%) $0.52

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
330%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/23/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.