Please ensure Javascript is enabled for purposes of website accessibility

Why Globalstar Inc. Jumped More Than 20% Higher Today

By Anders Bylund – May 16, 2016 at 11:41AM

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 long-suffering TLPS network plan is allegedly getting the final FCC approval it needs, giving the satellite networking specialist a whole new revenue stream.

What: Shares of satellite communications veteran Globalstar (GSAT 0.28%) soared more than 20% higher on Monday morning, adding to a 35% lift on Friday afternoon. Together, these moves add up to a 57% surge over two days.

So what: According to a press release from Globalstar, the FCC is about to approve the company's proposed terrestrial low-power service, or TLPS. Located in the radio spectrum space between the highest Wi-Fi channel and Globalstar's satellite networks, TLPS would add two more channels to existing Wi-Fi networks. Furthermore, Globalstar would then be able to build out its own land-based wireless network, using the TLPS spectrum and conventional wireless towers.

The TLPS plan was proposed more than three years ago. Globalstar share prices have increased more than sixfold since that original petition.

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

Now what: The company has been battling objections from wireless rivals and other special interest groups. The pending FCC approval will make all of these objections moot, as Globalstar's numerous trial installations have rebutted the concerns about interference with other wireless devices.

The Wi-Fi Alliance argued that an exclusive Globalstar license for the new band would harm other industry players and that the new service would overlap the current Channel 11 in a harmful way. In response, Globalstar said that it was not asking for any exclusive rights, nor looking for any license at all. With these concessions in mind, I can't wait to see the final FCC rules for the TLPS network -- and how Globalstar plans to implement this new asset.

But it's clearly a positive development for the company, regardless of the nitty-gritty details. Globalstar investors have been waiting for this moment with bated breath.

Anders Bylund has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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
$1.76 (0.28%) $0.01

*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 analyst team.

Stock Advisor Returns
342%
 
S&P 500 Returns
110%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/05/2022.

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.