Globalstar (GSAT) Gains as Qualcomm Buys 4.15 Million Shares

Recently, shares of Globalstar Inc. (NASDAQ: GSAT) gained a meaningful 6.1% or 23 cents per share, ending the trading session at $4 on Aug 14, 2014. Meanwhile, this surge marks the highest growth in the last four months. The recent stock buyout by mobile chipset giant Qualcomm Inc. (NASDAQ: QCOM) led to the unanticipated share rise.

 

Qualcomm bought nearly 4.15 million shares of Globalstar which lends it nearly 0.4% control over the latter. 

 

Recently, Globalstar reported second-quarter 2014 results wherein the top line grew 21% year over year to $24 million. The double-digit growth in revenues was mainly led by higher subscriber equipment sales and service revenues. Moreover, adjusted EBITDA in the reported quarter soared a sizeable 70% from the last-year quarter.

 

However, the bottom line in the reported quarter was considerably affected by the non-cash charges which resulted in a loss of $433.7 million. 

 

Based in Covington, LA, Globalstar provides satellite voice and data services to commercial and recreational users in over 120 countries. The company's product line offers mobile and fixed satellite telephones, simplex and duplex satellite data modems and flexible service packages. Many land-based and maritime industries benefit from Globalstar's offerings which enhance productivity from areas located beyond the coverage of cellular and landline services.

 

Qualcomm currently carries a Zacks Rank #3 (Hold). Better-ranked stocks worth considering in the technology sector include Ericsson (NASDAQ: ERIC) and DragonWave Inc. (NASDAQ: DRWI). Both have a Zacks Rank #2 (Buy).