What happened

Globalstar (GSAT -1.54%) investors went into Wednesday hoping to hear Apple (AAPL 1.27%) announce it was bringing satellite connectivity to the iPhone using Globalstar satellites. They got the partnership news that had been rumored, but not until toward the end of the Apple event.

Shares of Globalstar went on a roller-coaster ride while investors waited, falling as much as 23% at one point before rocketing more than 40% higher once the news became official.

So what

Talk of an iPhone able to send text messages and make phone calls via a satellite connection has been making the rounds for about a year, and increased chatter ahead of Apple's Wednesday new product event had helped Globalstar shares rocket nearly 60% higher in the past three months.

The companies made it official at the event. In a regulatory filing, Globalstar said that it would partner with Apple to bring limited satellite connectivity to certain Apple products when other terrestrial connections are unavailable.

As part of the partnership, Apple has been provided warrants to acquire up to 2.64% of Globalstar's outstanding stock at a price of $1.01 per share. Apple is under no obligation to buy the stock, but the company also was granted the right to participate in future equity raises. Globalstar also said it intends to abandon its Duplex messaging service to free up bandwidth for the Apple service, which would include abandoning about $175 million in assets and royalties.

Now what

Globalstar said it expects to generate revenue in a range of $185 million to $230 million in 2023, well ahead of the single analyst estimate for $130 million in sales. By 2026, when all of its new satellites are operational, total revenue is expected to grow by about 35% compared to the 2023 forecast, thanks primarily to these new partner relationships.

Satellite internet service has proven to be a tricky business to invest in over the years, but as technology improves, Globalstar is finding more uses for its assets. With a market capitalization of more than $4 billion today and just $136 million in revenue over the past 12 months, Globalstar is in no way a cheap space stock. But the Apple partnership is a reason to get excited, and investors are in a celebratory mood on Wednesday.