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Out Of This World? Chardan Grounds Globalstar To Neutral On FCC Decision

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Out Of This World? Chardan Grounds Globalstar To Neutral On FCC Decision

“Lobbying for and against the FCC’s NPRM on TLPS continues with ex partes filed recently suggesting the major focus is on the vote of Commissioner Michael O’Rielly,” Chardan Capital’s James McIlree mentioned.

McIlree downgraded the rating on Globalstar, Inc. (NYSE: GSAT) to Neutral.

Will TLPS Pass?

The analyst stated that Commissioner Pai announced on June 2 that he had voted against the TLPS proposal, while Commissioner Rosenworcel is also believed to have voted against TLPS.

“The focus on O’Rielly suggests the remaining commissioners, Wheeler and Clyburn, have either voted in favor of the proposal or are expected to,” according to the Chardan Capital report.

Even if TLPS is passed, it would likely be provisional or test period and initial deployment will be suggested, limited to 825 sites.

Related Link: This Was "Clearly Negative" For Globalstar

What If TLPS Does Not Pass?

“A year of testing increases the uncertainty of the spectrum’s allowed use and lowers the value to third parties who might be interested in leasing the spectrum from Globalstar. An outright no vote would be dire for the company,” McIlree stated.

The best scenario for the company would be an outright approval of TLPS, without conditions, although this seems the least likely outcome at present.

At best, there is likely to be an extended period of financial uncertainty, along with increased risk and continued uncertainty regarding the whether the company’s spectrum would ultimately be allowed use.

“If TLPS is approved, provisionally, the company would still likely face financing challenges over the next twelve months,” McIlree added.

Latest Ratings for GSAT

DateFirmActionFromTo
Apr 2020Morgan StanleyMaintainsEqual-Weight
Aug 2018Chardan CapitalDowngradesBuyNeutral
Apr 2018Morgan StanleyInitiates Coverage OnEqual-Weight

View More Analyst Ratings for GSAT
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