Globalstar, Inc. (NYSEMKT: GSAT)
Globalstar is having a strong day in the market today, following up on the gains we saw in the stock yesterday. As a result, there are tons of people that are asking if now is the time to buy the stock. Today, we’ll talk about why the stock is edging upward, what we’re seeing in the market today, and whether or not GSAT would be a good buy, given current data surrounding the stock. So, let’s get right to it…
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Why GSAT Is Heading Upward
As mentioned above, Globalstar is having a strong day in the market today and saw gains in the market yesterday. So, what’s causing the upward movement? The answer is simple. The reality is that GSAT isn’t as much gaining as it is recovering. Recently, the stock gave up a big portion of its value, and for good reason.
You see, GSAT is hoping to use airwaves that are currently reserved for satellite services. The goal here is that through using these air waves, the company will be able to improve WiFi services by about a third. This would be absolutely amazing. However, in order to use the airwaves, the company needs approval from the FCC. This is what caused the pain for the company recently.
Unfortunately, there are many companies that are against the plans. Companies like Apple and Google say that, if Globalstar is able to use these airwaves, we will likely see interference in mobile connectivity. So, cell phone users would have problems.
As a result, the FCC is voting on the proposal to use these airwaves, and it’s not looking good for GSAT. Unfortunately 2 of the 5 members of the FCC have already voted, and they voted against the plan. Now the company needs a positive vote from the remaining members of the FCC in order to move forward with their plan. Unfortunately, the chances of this are slim, which is why the stock lost around half of its value recently!
As investors, we know that price movements in the market tend to happen through a series of overreactions. So, it’s no stretch that the massive declines on GSAT were an overreaction. As a result, we’re seeing a correction that is pushing the value of the stock upward.
What We’re Seeing In The Market Today
As mentioned above, Globalstar is starting to recover from the recent massive declines that we saw on the stock. While the recovery started yesterday, we are seeing a continuation of positive movement in the market today. Currently (10:57), the stock is trading at $1.30 per share after a gain of $0.03 per share, or 2.76%, thus far today.
Is Now The Time to Buy GSAT?
While I would love to say that now is a great time to buy the stock, that simply isn’t the truth. The reality is that Globalstar stock is incredibly concerning at the moment, to say the least. If the company does not receive a yes vote from the FCC with regard to using airwaves previously reserved for satellite signals, it will mean that the massive amounts of time and money the company spent on the new WiFi product will go unrewarded. This would likely send the stock down in a big way. Because there’s a good chance that this possibility is going to come to fruition, I wouldn’t personally invest in the stock at the moment. However, there is an upside. If the FCC surprises with a yes vote, this thing could skyrocket. So, the decision is ultimately up to you.
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What Do You Think?
[Image Courtesy of Wikipedia]