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Insiders Are Buying Up Globalstar (GSAT) Stock. Here’s Why.

  • Globalstar (GSAT) will help power Apple’s (AAPL) emergency message services with its satellites.
  • Apple will provide the company with 95% of the capital necessary to cover the project’s capital expenditures.
  • Meanwhile, five insiders have purchased GSAT stock since the announcement was made.
GSAT Stock - Insiders Are Buying Up Globalstar (GSAT) Stock. Here’s Why.

Source: rafapress /

With the release of Apple’s (NASDAQ:AAPL) iPhone 14 and other accompanying models, the tech giant also announced a new collaboration with Globalstar (NYSEARCA:GSAT). Globalstar will provide Apple with its low-earth orbit (LEO) satellite services when users send emergency or SOS messages in locations with no cellular service. Meanwhile, Apple will provide Globalstar and other companies with $450 million to advance the satellite infrastructure necessary to support the collaboration. Globalstar will receive the majority of the funding, although the recipients of the remaining money were not disclosed. Apple is also eligible to receive warrants to buy 2.64% of Globalstar’s outstanding shares at $1.01 per share.

The funding will cover about 95% of the expenses necessary to fund the new satellites. Goldman Sachs (NYSE:GS) will help cover the remaining finances, which is expected to be completed next quarter.

Meanwhile, GSAT insiders have swarmed into their company stock en masse. Let’s get into the details.

Five Insiders Purchase GSAT Stock

Five insiders purchased 265,693 shares of GSAT between Sept. 9 and Sept. 13. The largest individual purchase was attributed to Director James Monroe III. On Sept. 12, he purchased 100,000 shares at an average price of $1.83. On the same day, CEO David Kagan scooped up 25,000 shares at an average price of $1.78 per share. After the purchase, Kagan now owns a total of 3.33 million shares.

The second largest purchase within that timeframe was attributable to Director Keith Cowan. On Sept. 9, Cowan purchased 88,000 shares at an average price of $1.68 per share. The timing of the purchases after the Apple announcement makes it clear that Globalstar’s management is ecstatic about the partnership.

In addition, guidance for 2023 was raised shortly after. The company now expects 2023 revenue of between $185 million and $230 million. The wide range will depend on how far it will achieve goals related to the Apple partnership. Analysts had previously forecasted 2023 revenue of $130.6 million. The new satellites are expected to be fully operational by 2026. By then, revenue is expected to grow by 35% when compared to 2023 revenue.

For savvy investors, the partnership may have not come as a surprise. In 2020, Globalstar stated that it would provide services for an undisclosed customer. Furthermore, B. Riley analysts published a note last month, stating that the mystery company was most likely Apple.

On the date of publication, Eddie Pan held a LONG position in AAPL. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Eddie Pan specializes in institutional investments and insider activity. He writes for InvestorPlace’s Today’s Market team, which centers on the latest news involving popular stocks.

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