The $1.5 Billion Investment From Apple that Had One Little Known Satellite Company Explode 30%...

Apple on TikTok: “Suspect has an addiction of burning massive piles of cash and calling it a strategy” 

Well after getting absolutely clapped with their last earnings report, Apple figured the best thing to do in this “Is AI spending worth it?” era is to drop another $1.5 billion investment. The investment? Global Star, a satellite operator, whose stock exploded 30% on the news. 

(Source: CNBC) 

In short, Apple’s putting down $400 million for a 20% equity stake in Globalstar’s new satellite constellation - while also prepaying $1.1 billion in cash to help Globalstar fund the network. The reason mainly, is to give GlobalStar’s enough chunk of change (about $232 million) to pay down its debt, which probably has their accountants breathing a sigh of relief.

(Source: Giphy) 

But, why in da hell is Apple so thirsty for Globalstar? The Answer: think iPhone 14. You see, Apple’s been using Globalstar’s 31 current satellites since 2022 to let iPhone users send emergency texts when they’re out of range and deep in the wilderness like it’s the Blair Witch Project. Now sure, it’s cool that you can get a basic text out when you’re lost on a hiking trail or stuck in the boonies, but that’s just scratching the surface of what Apple’s aiming for. With this new constellation, Apple’s likely gunning for something bigger—though, of course, both companies are keeping the juicy details under wraps (obviously).

(Source: Giphy) 

The new satellites are already in the works, thanks to Canadian space-tech heavyweight MDA, which snagged a $327 million contract to build 17 satellites with options for up to 9 more. Additionally, our friendly neighborhood renaissance man, Elon Musk and his SpaceX, will be the QB1 who starts launching them next year.  

(Source: The Verge) 

But, but, but… here’s where it gets interesting: Globalstar’s regulatory filings are calling this new setup the “Extended MSS Network,”. Now your guess is as good as mine to what that “actually” means, but it's safe to assume Apple’s not just looking to improve emergency SOS features. The competition is already heating up, with SpaceX and AST SpaceMobile pushing for satellite texting, voice, and broadband services—so you can bet Apple wants a bigger piece of the pie.

So, what’s in it for Globalstar besides Apple’s sweet cash infusion? Well, besides paying off some of that crippling debt (bless), they’re allocating 85% of their network capacity to Apple—which, let’s face it, is probably the smartest move they’ve made since, well, ever. The other 15%? Globalstar’s keeping that for its legacy business—think remote monitoring and tracking devices.

(Source: GuruFocus) 

On the other hand, while this all sounds great on the surface, there’s still the question of whether Apple’s iPhone users are going to have to pay up for these satellite services. So far, Apple’s been offering the service for free since the iPhone 14 launch, but that goodwill’s only going to last until 2025. After that, you might find a little extra charge on your Apple bill for the privilege of texting from the middle of nowhere.

(Source: Giphy) 

Bottom line: If you’re betting on the future of satellite connectivity, Globalstar just got a huge boost from its Cupertino benefactor. And for Apple, it’s a strategic move to make sure iPhones stay connected—whether you're 30,000 feet in the air or lost in the wilderness. How’s that for innovation?

In the meantime, do what you will with this information and as always stay safe and stay frosty, friends! Until next time… 

PS: Before you jump on the GlobalStar/Apple bandwagon, you might want to see how we’re already scoring big at Stocks.News. Just this Wednesday, we locked in a 64% winner—in under five hours. Want to know how we did it? Check out the details on becoming a Stocks.News Premium member (don’t miss out on the next exciting trade).

Stocks.News holds positions in Apple as mentioned in the article.