GSAT

Globalstar ($GSAT) Director Acquires Additional 125,000 Shares Despite Q1 Earnings Miss, Signaling Confidence in Apple Partnership

05/19/2025 14:28

Globalstar Inc ($GSAT) board member James Monroe III has executed significant share purchases last week. According to a May 16 filing, Monroe acquired a total of 125,000 shares between May 12 and May 16 for approximately $2.33 million, at an average price of $18.67 per share. This substantial purchase was made at depressed price levels following the company's recent earnings announcement. Monroe, a long-term director of Globalstar, has been consistently acquiring company shares since early this year. Notably, in March, he purchased a total of 334,546 shares worth approximately $7.74 million across five separate transactions, demonstrating strong confidence in the company's future. It's worth noting that these transactions included a direct purchase of 209,546 shares from CEO Paul E. Jacobs on March 28. Globalstar, a provider of low-Earth orbit satellite communication services, garnered significant attention last November when Apple announced plans to invest up to $1.5 billion in the company. This investment, comprising $1.1 billion in cash and a $400 million equity purchase, came with the condition that 85% of Globalstar's network capacity would be allocated to Apple. Following this announcement, the stock surged more than 30%, reaching heights of $34 by early December. In February 2025, the company announced the expansion of its contract with MDA Space to C$1.1 billion (approximately $880 million) to accelerate the development of next-generation satellites. This project includes over 50 advanced digital satellites and represents a crucial strategy in competing with larger firms such as SpaceX's Starlink. However, recent financial results have fallen short of expectations. In its Q1 2025 earnings release on May 8, Globalstar reported an adjusted loss of $0.16 per share, significantly worse than the $0.03 loss analysts had predicted. Revenue increased by 6.3% year-over-year to $60.03 million but missed the forecast of $63.83 million. This disappointing performance drove the stock price down from over $20 in early May to the mid-$18 range recently. Against this backdrop, Monroe's continued share purchases are particularly noteworthy. The fact that substantial buying has continued after the earnings release and subsequent stock decline suggests that insiders view the current share price as undervalued. Examining trading patterns from March-April, we see that while CFO Rebecca Clary and officer Barbee Ponder IV conducted small sales, Monroe consistently executed large purchases. Reviewing Globalstar's financial position, the company currently holds approximately $241 million in cash but carries $511 million in debt, resulting in a high debt-to-equity ratio of 146%. This financial leverage reflects the company's investments for future growth. Analysts project that Globalstar will grow at an average rate of 15% annually over the next three years, substantially outpacing the expected 3% growth for the U.S. telecommunications industry. The current analyst consensus remains 'buy' with a 12-month price target of $52.50, suggesting upside potential of over 180% from current levels. Globalstar's future heavily depends on the growth opportunities presented by its partnership with Apple and expanded contract with MDA Space. While the low-Earth orbit satellite communication market faces intense competition from giants like SpaceX, Amazon, and OneWeb, Globalstar's securing of Apple as a powerful partner positions it for differentiated growth. Monroe's repeated large-scale purchases appear to reflect an insider's strong conviction in these long-term growth prospects. Investors should take note of the Apple partnership, the expanded MDA Space contract, and the consistent buying signals from an inside director, despite the disappointing Q1 results. The upcoming Q2 earnings report and developments in the Apple collaboration will be critical factors determining the stock's near-term direction.

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