Amazon (AMZN) Stock Surges as $11.6B Globalstar Deal Takes On Musk’s Starlink

TLDR

• Amazon is buying Globalstar ($GSAT) for $11.6 billion in a cash-and-stock deal, offering $90 per share
• The deal gives Amazon key radio frequency spectrum to launch direct-to-device satellite service in 2028
• Globalstar stock jumped 9.6%; Amazon rose 3.8%; rival AST SpaceMobile fell nearly 11%
• Apple’s Emergency SOS satellite service will transition to Amazon’s Leo satellite network
• The acquisition is Amazon’s second largest ever, expected to close in 2027, pending regulatory approval

Amazon is buying satellite firm Globalstar in an $11.6 billion deal aimed at closing the gap with Elon Musk’s Starlink in the fast-growing satellite communications market.

The deal, announced Tuesday, values Globalstar at $90 per share — a premium of over 31% to its April 1 closing price and roughly 117% above its late-October price.

Globalstar shareholders can choose $90 in cash per share or 0.3210 Amazon stock per share. The total cash payout is capped at 40% of the deal.

Amazon.com, Inc., AMZN

Amazon stock rose 3.8% to $249.02 on the news. Globalstar surged 9.6% to $79.91. MDA Space, Globalstar’s primary contractor, climbed 9%. AST SpaceMobile, a direct competitor in the direct-to-device space, dropped nearly 11% to $88.57.

The acquisition is expected to close in 2027, subject to regulatory approval from the FCC and deployment milestones.

This is Amazon’s second largest acquisition after its $13.7 billion Whole Foods purchase in 2017.

Why Spectrum Is the Real Prize

Globalstar operates only a couple dozen active satellites, but that’s not really the point. The real value here is spectrum — the FCC-licensed radio frequencies needed to beam connectivity directly to unmodified smartphones.

Amazon’s Leo broadband network currently has roughly 200 satellites in orbit. It has a target of over 7,700 eventually, with about 1,600 required to be in orbit by July under regulatory rules.

Through Globalstar, Amazon plans to launch a direct-to-device service in 2028 — connecting mobile phones directly via satellite without cell towers.

Starlink, meanwhile, already has 10,000 satellites serving around 10 million users globally. It’s been developing its own direct-to-device capability through a partnership with T-Mobile.

Apple Service Moves to Amazon Leo

One notable part of the deal: Apple’s Emergency SOS satellite feature, currently powered by Globalstar on iPhones and Apple Watch, will transition to Amazon Leo.

Apple invested $1.5 billion in Globalstar in 2024 and holds roughly a 20% stake. The company didn’t immediately respond to queries on what happens to that stake post-acquisition.

Amazon has also signed Delta Air Lines to use Leo for in-flight Wi-Fi. Starlink holds a broader airline roster including United, Southwest, British Airways, and Emirates.

The deal value, Amazon noted, will fluctuate based on its share price until close. Globalstar equity was valued at around $10.8 billion as of April 9.

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