Market Overview

Did Globalstar Deserve To Move Higher On Straight Path Takeover News?

Did Globalstar Deserve To Move Higher On Straight Path Takeover News?
Related GSAT
Mid-Afternoon Market Update: Sonoma Pharmaceuticals Falls Following Q4 Miss; Teligent Shares Surge
Mid-Morning Market Update: Markets Open Higher; Magna Tops Q1 Views

AT&T Inc. (NYSE: T) announced Monday that it had agreed to acquire Straight Path Communications Inc (NYSE: STRP) in a deal valued at $1.6 billion, including liabilities.

The Straight Path acquisition highlights “the scarcity value of spectrum,” and Globalstar, Inc. (NYSE: GSAT) may soon be in a position to monetize its global spectrum, Chardan Capital Markets’ James McIlree said in a report. He reiterates a Buy rating for Globalstar, with a price target of $2.50.

Inferences From The Acquisition

Straight Path controls 222 billion MHz-POPs [megahertz per population] in the 28GHz/39HGz segment of the spectrum. This spectrum has been designated for 5G small cell use. The acquisition price of $1.6 billion underlines the high value for spectrum, McIlree commented.

“Globalstar's 2.4GHz spectrum is a fair distance from Straight Path's, with significantly different propagation characteristics so a direct price per MHz-POP comparison is not relevant. However we do believe the Straight Path purchase highlights the scarcity value of spectrum,” the analyst wrote.

Globalstar is in the process of seeking ways to monetize its US spectrum position. McIlree believes the company would be in a position to commence its efforts to monetize its global spectrum as well in the coming quarters.

Related Links:

Straight Path Communications Buyout Blindsides Short Sellers

Cliffs Natural Shares Are Hot Hot Hot For Shorts, And So Are These Other 5
Image Credit: Coverage of Globalstar, By GrandDixence [Public domain], via Wikimedia Commons

Latest Ratings for GSAT

Apr 2018Morgan StanleyInitiates Coverage OnEqual-Weight
Feb 2017Chardan CapitalUpgradesNeutralBuy
Jun 2016Chardan CapitalDowngradesBuyNeutral

View More Analyst Ratings for GSAT
View the Latest Analyst Ratings

Posted-In: Analyst Color Long Ideas News Reiteration M&A Analyst Ratings Movers Tech Best of Benzinga


Related Articles (GSAT + STRP)

View Comments and Join the Discussion!