$9 billion acquisition talks for satellite operator GSAT; Amazon wants to join the "space race"

Amazon seeks to challenge SpaceX in the low-Earth orbit satellite internet market by acquiring Globalstar. According to sources quoted by the Financial Times, Amazon is in acquisition talks with satellite telecom operator Globalstar. As of Wednesday, April 1, Globalstar had a market value of around $9 billion, and its stock price has risen roughly 230% in the past year. The market has long speculated that the company could become a potential competitor to SpaceX or a merger target. Following the news, Globalstar’s shares jumped more than 15% after hours. Negotiations have been ongoing for quite some time, but both sides are still discussing several complex issues. Sources caution that there is no final agreement yet, and talks could change or collapse. Globalstar said, “The company’s policy is not to comment on industry rumors or speculation”; Amazon declined to comment; Apple did not immediately respond. Apple holds a 20% stake, complicating the deal structure One of the core obstacles to the acquisition is Apple’s stake in Globalstar. In 2024, Apple invested $1.5 billion in Globalstar, acquiring about 20% equity. As part of the deal, Globalstar committed to reserve 85% of its network capacity for Apple, to provide satellite SMS services for iPhones outside of cellular signal coverage. This means that for Amazon to complete the acquisition, it must also negotiate with Apple to address this strategic capacity arrangement, making the deal structure more complex. Amazon's pressure to catch up Amazon’s project for entering the LEO satellite internet market is called “Leo,” and it completed its first batch of satellite launches last year. But the gap is huge: Amazon currently has just over 180 satellites in orbit, while SpaceX’s Starlink now has more than 10,000 active satellites. Progress is also under pressure. In February this year, Amazon had to apply to the FCC for a two-year extension to meet the regulatory requirement of launching 1,600 satellites by July. According to regulatory filings, Amazon plans to raise the number of in-orbit satellites to about 700 by mid-year, but limited launch capacity is restricting its pace of expansion. Amazon CEO Andy Jassy told investors in February that Leo is one of a series of “incremental opportunities” the $2.2 trillion e-commerce giant intends to pursue. Globalstar's commercial value Founded in 1991, Globalstar is already a satellite telecom company with substantial operational scale. Its latest annual report shows revenue of $273 million for fiscal year 2025, up 9% year-on-year; operating income was $7.4 million, compared to a slight loss the previous year. For Amazon, acquiring Globalstar not only means obtaining a ready-made satellite network and spectrum resources, but also directly narrowing the gap with Starlink. Bloomberg reported that Globalstar began exploring a sale in October last year and had preliminary contact with SpaceX, indicating considerable interest from multiple parties. Commercially, Amazon has signed agreements with JetBlue and Delta Airlines to provide in-flight internet services for their flights in 2027 and 2028 respectively—making Globalstar’s network capacity strategically important for Amazon. Risk Disclosure and Disclaimer The market is risky, and investors should proceed with caution. This article does not constitute individual investment advice, nor does it take into account specific investment targets, financial situations, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article are suitable for their particular circumstances. Investments made based on this are at your own risk.