Apple’s satellite plans just sent this stock on a wild ride

The shares of the satellite company Globalstar Inc. were launched on Wednesday after Apple Inc. announced the partnership. with the satellite company to provide emergency services.

Globalstar Inc. GSAT Rumors
-4.07%
support for an Apple Inc. AAPL,
+1.18%
The iPhone satellite service has been swirling for more than a year, and some investors expected the announcement at last year’s iPhone unveiling. Apple confirmed the launch of the text-based service on Wednesday during an event at the tech giant’s headquarters, with Apple executive Ashley Williams explaining that antennas on the new iPhone 14 Pro can connect to unique satellite frequencies .

“Now your iPhone can connect you to the help you need when you’re off the grid,” he said.

All the news from the Apple event: Apple keeps iPhone 14 prices the same

Apple said the service will be available for free to customers who buy an iPhone 14 for the first two years.

Globalstar’s stock fell 15.8% on Wednesday, when it halted ahead of Apple’s announcement at about 1:53 a.m. ET. When shares began trading again at about 2:45 p.m. east, soared to gains of more than 40% before settling into a daily gain of close to 10%. The stock then fell 5.7% on the day.

Apple shares gained after the event, though they were up less than 1%. The S&P 500 SPX,
+1.99%
ahead by 1.9%.

Look now: Apple’s iPhone 14 event could herald a new satellite era for smartphones

In a filing, Globalstar explained that the services are expected to be available to customers in the fourth quarter of 2022. Apple said the service will launch in the US and Canada in November.

“Under the terms of the Partnership Agreements, Globalstar is required to raise additional debt capital to build and launch the new satellites,” it said. “Globalstar instructed Goldman Sachs & Co. LLC GS,
+1.49%
and is currently exploring capital markets opportunities and expects to complete a financing in the fourth quarter of 2022.”

Other phone manufacturers also use satellite technology. Last month T-Mobile US Inc. TMUS,
+2.58%
and SpaceX announced a partnership that aims to connect the majority of smartphones already on T-Mobile’s network to SpaceX satellites.

Despite the existence of strong LTE and 5G wireless networks, more than half a million square miles of the US and vast stretches of ocean are untouched by cell phone signals from any carrier, the companies said in a statement. To solve this problem, the companies will build a new network, which will be transmitted from Starlink satellites using T-Mobile’s mid-band spectrum nationwide.

On Tuesday, Huawei unveiled the Mate 50 series, which includes phones capable of sending messages via China’s BeiDou global satellite network, The Verge reports. The BBC also reports that a British smartphone maker is planning a satellite-connected device.

Globalstar stock is up 68.5% in 2022, compared to Apple’s 12.1% decline. The S&P 500 fell 16.5% over the same period.

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