iPhone 14 there will be some kind of satellite connection. This is a big deal for space, space communications technology and space companies. So why is it
Stocks Fall on Apple Deal News?
Wednesday, Apple (ticker: AAPL) announced with the upcoming iPhone 14 users “use Emergency SOS via satellite to text emergency services when you’re out of cellular and Wi-Fi range.”
Globalstar (GSAT) will provide satellite service. The deal will net Globalstar hundreds of millions in sales in 2023 alone. Still, the stock closed up nearly 19% on Thursday, while
grew by 0.7% and 0.6% respectively. What gives?
Starting points matter. That’s one reason why shares of Globalstar and other satellite stocks fell on Thursday. Globalstar shares are still up about 17% since the rumors emerged iPhone 13 will include possibility of satellite communication. The S&P 500 is down about 11% over the same period.
Thursday was just another case of the adage: Investors buy the rumor and sell the news. Essentially, this means that the stock market is forward-looking, and the potential for satellite companies to profit from mobile communications applications is already in the stock. Raymond James analyst Rick Prentice wrote in a research note this week that Apple’s move was “expected.”
A tweet from Elon Musk also added to the daily decline. Globalstar shares fell roughly 10% before Musk tweeted that SpaceX and its space internet business Starlink were in talks with Apple.
The existing satellite industry that competes with SpaceX clearly worries investors.
Prentiss does not cover Globalstar shares, but it does
(IRDM), among others. He rates this stock a Buy and has a price target of $51.
The movement of Iridium shares on Thursday could also confuse investors. Shares rose 0.6%, and it didn’t win Apple business. But Iridium shares are only up about 8% since the 2021 iPhone 13 rumors.
The confusion continues. Globalstar will launch more satellites into low Earth orbit, but has a backlog of launch suppliers
Missile Laboratory USA
It fell about 3% in midday trade but closed up 0.5%. Availability at launch provider
( ASTR ) fell more than 5%, but closed down 0.4%.
The starting points do not help investors understand these reactions. Shares of Rocket Lab fell about 50% after the iPhone 13 rumors. Shares of Astra are down about 94% over the same period.
It appears that investors are still figuring out the winners and losers of cell phones connecting to satellites, and how big of a deal it is for the commercial space business as a whole.
The only thing investors seem to know now is that the possibility of satellite and cell phone connectivity is real. Remember, T-Mobile US ( TMUS ) signed a deal with SpaceX in late August for some services. Now there’s the iPhone 14.
Write to Al Root at [email protected]