Amazon Acquires Globalstar for $11.6 Billion
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 5 days ago
0mins
Should l Buy AMZN?
Source: Fool
- Acquisition Amount: Amazon has announced its acquisition of Globalstar for $11.6 billion, with a payment of $90 per share in cash or stock, representing a 23% premium over Globalstar's share price just yesterday, significantly enhancing Amazon's position in the satellite communications market.
- Market Reaction: Following the announcement, Amazon's stock rose by 3.83% while Globalstar's shares surged by 9.3%, indicating a positive response from investors, particularly those holding Globalstar shares who are thrilled about the acquisition.
- Satellite Network Expansion: This acquisition allows Amazon to gain approximately 24 satellites from Globalstar, instantly increasing the size of its Amazon Leo satellite constellation by about 10%, thereby strengthening its competitive edge in the satellite internet market.
- Technology Capability Inheritance: The deal enables Amazon to inherit Globalstar's direct-to-cell communication capabilities, avoiding the time and costs associated with developing such technology independently, thus accelerating its strategic positioning in the satellite communications sector.
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Analyst Views on AMZN
Wall Street analysts forecast AMZN stock price to rise
44 Analyst Rating
41 Buy
3 Hold
0 Sell
Strong Buy
Current: 249.700
Low
175.00
Averages
280.01
High
325.00
Current: 249.700
Low
175.00
Averages
280.01
High
325.00
About AMZN
Amazon.com, Inc. provides a range of products and services to customers. The products offered through its stores include merchandise and content it has purchased for resale and products offered by third-party sellers. The Company’s segments include North America, International and Amazon Web Services (AWS). It serves consumers through its online and physical stores and focuses on selection, price, and convenience. Customers access its offerings through its websites, mobile apps, Alexa, devices, streaming, and physically visiting its stores. It also manufactures and sells electronic devices, including Kindle, Fire tablet, Fire TV, Echo, Ring, Blink, and eero, and develops and produces media content. It serves developers and enterprises of all sizes, including start-ups, government agencies, and academic institutions, through AWS, which offers a set of on-demand technology services, including compute, storage, database, analytics, and machine learning, and other services.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Launch Capacity Bottleneck: Amazon's reliance on external companies for satellite launches, in contrast to SpaceX's ability to launch its own rockets, has resulted in SpaceX being able to deploy thousands of satellites annually, further solidifying its market lead.
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- Satellite Deployment Progress: Despite aiming to deploy over 3,000 satellites, Amazon has only managed to deploy 241 so far, facing a July 30, 2026 FCC requirement, necessitating an expansion of its launch capacity.
- Investment Risks and Opportunities: With capital expenditures projected at $200 billion, Amazon may face negative free cash flow in 2026; however, management remains confident in returns from cloud computing and e-commerce investments, while the risks associated with the Leo project warrant attention.
See More
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