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Wednesday, October 5, 2022

Globalstar, Inc. (NYSE: GSAT) On the Move Since Apple Selected GSAT as Partner on Emergency Message Feature on the iPhone 14

Globalstar, Inc. (NYSE: GSAT) has been on the move northbound recently seeing highs of $2.98 per share since Apple selected Globalstar Inc as its partner for a feature that would allow iPhone 14 users to send emergency messages from remote locations. Apple said it was dedicating $450 million from its advanced manufacturing fund toward satellite infrastructure to support the feature with GlobalStar receiving the majority of the funding. LEO satellites operate 36 times closer to the earth than traditional ones and take less time to send and receive information, leading to faster broadband service even in remote areas. 

Apple will pay for 95% of the approved capital expenditure for the new satellites that would be needed to support the service, but Globalstar said it will still need to raise additional debt to construct and deploy the satellites. Globalstar tapped investment bank Goldman Sachs & Co to finance the deal. The service is free for two years with every iPhone 14 purchase, and launching in the US and Canada, from November. Globalstar expects that its business strategy will allow it to generate reliable cash flow with substantial growth potential and greater profitability. Including the Partnership Agreements and excluding terrestrial spectrum, the Company expects its total revenue for the year ended December 31, 2023 to range between $185 million to $230 million, depending in part upon the Company’s achievement of certain performance and other targets under the Partnership Agreements, generating an EBITDA margin of approximately 55%.    

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Globalstar, Inc. (NYSE: GSAT) pioneered personal safety by introducing its SPOT Satellite GPS Messenger in 2007. Today, leveraging its low-earth orbit (LEO) satellite constellation, Globalstar reliably connects and protects assets, transmits key operational data, and saves lives – from any location – for consumers, industrial companies and government agencies in over 120 countries. With a portfolio that includes SPOT GPS messengers, next-generation IoT products and modems, and cloud-based telematics solutions, Globalstar’s cost effective satellite-powered innovations give users visibility and intelligence for improving safety and operational efficiencies. 

During 2021 the Company acquired the remaining ownership of its joint venture in South Korea and also took over the operations of its three gateways in Australia that were previously operated by an Independent Gateway Operator.  

Globalstar’s constellation of Low Earth Orbit (“LEO”) satellites includes second-generation satellites and certain first-generation satellites. The Company also has one on-ground spare second-generation satellite that it plans to launch in the near future. Globalstar’s goal is to provide service levels and call or message success rates equal to or better than the Company’s MSS competitors so its products and services are attractive to potential customers.  

In February 2022, Globalstar entered into a satellite procurement agreement with Macdonald, Dettwiler and Associates Corporation pursuant to which the Company will acquire 17 satellites that will replenish its existing constellation and ensure long-term continuity of its mobile satellite services for a purchase price of $327 million. The technical specifications and design of these new satellites are similar to the Company’s current second-generation satellites. Rocket Lab USA, Inc. is the Vendor’s satellite bus subcontractor under the Procurement Agreement.  

Globalstar satellites communicate with a network of gateways, each of which serves an area of approximately 700,000 to 1,000,000 square miles.  Each of our gateways has multiple antennas that communicate with the Company’s satellites and pass communications seamlessly between antenna beams and satellites as the satellites traverse the gateways, thereby reflecting the signals from users’ terminals to Globalstar’s gateways.  

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GSAT

The specialized needs of Globalstar’s global customers span many industries and has of January 1, 2022 the Company had approximately 768,000 subscribers worldwide. The Company’s top revenue-generating markets in the United States and Canada are governments, public safety and disaster relief, oil and gas, recreation and personal telecommunications.  

Globalstar also offers GSP-1600 and GSP-1700 phones. Both phones include Qualcomm Incorporated’s patented CDMA technology, which the Company believes provides superior voice quality when compared to competitors’ handsets. The GSP-1700 phone includes a user-friendly color LCD screen and a variety of accessories.   

The SPOT product family has initiated approximately 8,200 rescues since its launch in 2007. SPOT delivers affordable and reliable satellite-based connectivity and real-time GPS tracking to hundreds of thousands of users, completely independent of cellular coverage. Globalstar currently sells SPOT Gen4TM, SPOT X® and SPOT Trace®. SPOT Gen4TM offers enhanced tracking features and is also water resistant. The product enables users to transmit predefined messages to a specific preprogrammed email address, phone or data device, including requests for assistance and “SOS” messages in the event of an emergency. SPOT X® is a two-way SPOT device with keyboard functionality allowing subscribers to send and receive SMS messages. SPOT X® connects to a smartphone via Bluetooth® wireless technology through the SPOT X® app to send and receive satellite messages. SPOT Trace® is a cost-effective, anti-theft and asset-tracking device. SPOT Trace® ensures cars, motorcycles, boats, ATVs, snowmobiles and other valuable assets are where they need to be, notifying owners via email or text anytime movement is detected, using 100% satellite technology to provide location-based messaging and emergency notification for on or off the grid communications. The Company has distribution relationships with a number of “Big Box” retailers and other similar distribution channels, including Amazon, Bass Pro Shops, Cabela’s, Camping World, Gander Outdoors, REI, Sportsman’s Warehouse, Academy, and West Marine.   

Commercial IoT service is currently a one-way data service from an IoT device over the Globalstar System that can be used to track and monitor assets. Our subscribers use our Commercial IoT devices for a host of applications: to track assets, such as cargo containers and rail cars; to monitor utility meters; and to monitor oil and gas assets. At the heart of the Commercial IoT service is a demodulator and RF interface, called an appliqué, which is located at a gateway and an application server in our facilities. The appliqué-equipped gateways provide coverage over vast areas of the globe. The small size of the IoT devices makes them attractive for use in tracking asset shipments, monitoring unattended remote assets, trailer tracking and mobile security. Current users include various governmental agencies, including the Federal Emergency Management Agency (“FEMA”), the U.S. Army, the U.S. Air Force, the National Oceanic and Atmospheric Administration (“NOAA”), the U.S. Forest Service and the U.K. Ministry of Defense, as well as other organizations, including BP, Shell and The Salvation Army. 

On September 7 Apple selected Globalstar Inc as its partner for a feature that would allow iPhone 14 users to send emergency messages from remote locations. Apple said it was dedicating $450 million from its advanced manufacturing fund toward satellite infrastructure to support the feature with GlobalStar receiving the majority of the funding. Globalstar tapped investment bank Goldman Sachs & Co to finance the order. LEO satellites operate 36 times closer to the earth than traditional ones and hence take less time to send and receive information, leading to faster broadband service even in remote areas. 

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Currently trading at a $3.2 billion market valuation GSAT continues to sit at the top of many speculators watch lists. GSAT) has been on the move northbound recently seeing highs of $2.98 per share since Apple selected Globalstar Inc as its partner for a feature that would allow iPhone 14 users to send emergency messages from remote locations. Apple said it was dedicating $450 million from its advanced manufacturing fund toward satellite infrastructure to support the feature with GlobalStar receiving the majority of the funding. LEO satellites operate 36 times closer to the earth than traditional ones and take less time to send and receive information, leading to faster broadband service even in remote areas. Apple will pay for 95% of the approved capital expenditure for the new satellites that would be needed to support the service, but Globalstar said it will still need to raise additional debt to construct and deploy the satellites. Globalstar tapped investment bank Goldman Sachs & Co to finance the deal. The service is free for two years with every iPhone 14 purchase, and launching in the US and Canada, from November. We will be updating GSAT as events unfold so make sure you are subscribed to Microcapdaily so you know what is going on with GSAT.

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Disclosure: we hold no position in GSAT either long or short and we have not been compensated for this article.

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