Globalstar, Inc. (NYSEAMERICAN: GSAT) is having a strong day in the market today, and for good reason. The company announced that its partner, Nokia, has entered into an agreement that will drive revenue. Here’s what’s going on:
Skip to What You Want to Read
- Globalstar Announces Agreement
- Management Commentary
- Why Investors Are Excited
- Risks to Consider Before Buying GSAT Stock
- Final Thoughts
Globalstar Announces Agreement
In the press release, Globalstar said that its business partner, Nokia, has entered into an agreement with Tideworks Technology. The agreement surrounds the deployment of the Band 53 spectrum designed by GSAT at the Port of Seattle, Terminal 5.
In the release, GSAT said that the deployment marks the second collaboration between it and Nokia at a United States Port.
The company went on to explain that it developed the Band 53 ecosystem with a group of priority partners like Nokia. Band 53 is a mid-band spectrum resource that GSAT offers to its partners for deployment with customers that would otherwise not have access to the benefits of licensed spectrum.
The company closed the release saying that its Band 53 terrestrial authorizations in multiple countries around the globe, combined with Nokia’s global reach, present an exciting opportunity for secure wireless solutions.
In a statement, Jay Monroe, Executive Chairman at GSAT, had the following to offer:
We are excited to be a part of this opportunity with Tideworks and Nokia. Band 53 offers partners secure and reliable connectivity in any environment. Utilizing the band allows customers to deploy considerably less access points than when relying on Wi-Fi leading to superior security, performance and long-term value.
Why Investors Are Excited
This is overwhelmingly exciting news. After all, this is the second collaboration between Globalstar and Nokia at a United States Port. Moreover, each one will drive significant revenue for the company.
So, not only does this news show that the relationship between GSAT and Nokia is a strong one, it shows that it will generate tremendous revenue as Band 53 is rolled out in Ports around the United States.
Risks to Consider Before Buying GSAT Stock
If you plan on investing in anything, you’re going to have to accept risk. After all, risk is part of investing. When it comes to Globalstar, the most significant risks to consider before buying include:
- Penny Stock Risks. Globalstar is a penny stock. As a result, it is susceptible to high levels of volatility, making entrance and exit decisions more difficult. Furthermore, the company’s business model is not yet proven, adding to the risk.
- Profitability. GSAT is far from profitability. If the money the company has in the bank isn’t enough to get it to profitability, it may look to raise funds through the sale of newly-issued shares. Should this be the case, dilution will be the result, sending the stock down.
While there are risks to consider before buying GSAT stock, all investments come with risk. Nonetheless, the company seems to be onto something.
At the end of the day, Globalstar has partnered with several major brands, and these partnerships are clearly paying off. As its Band 53 product continues to roll out, the company will continue to see growth in revenue, creating a compelling opportunity around GSAT stock.