things haven’t worked out for GSAT stock. Shares crashed from $15 to less than a dollar each during the 2008 Financial Crisis. They made it back to $4 at one point since then, but have largely lingered in penny stock territory. Earlier this summer, GSAT stock appeared to be heating up, however that soon fizzled out.
Globalstar is also benefiting from a growing source of revenue. This is an example of the Internet of Things (IoT) (IoT). Not only people, but also equipment, require communication in faraway locations. As more industrial equipment, sensors, and other devices become connected to the internet, the demand for dependable broadband grows. In the present environment, Globalstar’s network appears to be a perfect asset.
hroughout the summer, traders built up excitement for Globalstar. There were all sorts of suggestions that the new Apple (NASDAQ:AAPL) iPhone 13 would include satellite phone capability. These weren’t entirely unfounded, either.
the Apple new product launch came and went without any details of an actual Globalstar partnership. GSAT stock quickly melted from $2.50 back into the mid-$1s following the Apple disappointment. Getting an iPhone partnership would have validated Globalstar in a tremendous way and potentially made the firm a profitable player in one move. Now, however, it’s back to the old grind for Globalstar.
Apple CEO Tim Cook talked about potentially using satellites in a future phone to get around limitations of local carriers in some markets. Additionally, in a huge boost for Globalstar, Qualcomm (NASDAQ:QCOM) added support for Globalstar’s spectrum into its 5G modem, giving Globalstar far more connectivity opportunities. Qualcomm, after all, is the de facto standard for rolling out new generations of mobile technology, and GSAT stock had skyrocketed on that news.
If Apple had opened up a market for Globalstar, that could have changed everything in an instant. Instead, Globalstar has to make due with its existing operations.
Over the past four years, Globalstar has tended to generate about $130 million annually in revenues. In turn, it sees operating losses of around $60 million each year off of that revenue base. In theory, Globalstar should be a high-margin strongly cash flow-generative business. However, it simply doesn’t have enough customers yet to fully defray its high fixed costs. Maintaining a satellite network has higher overhead than, say, a software business.