Markets

Why Globalstar Stock Soared in June

What happened

Satellite communications specialist Globalstar (NYSEMKT: GSAT) has been a tough stock to love in recent years, with shares down more than 80% from mid-2017 through the end of last year. But the sentiment has changed for the better in 2021, and the shares climbed 11.3% in June, according to data provided by S&P Global Market Intelligence.

So what

Globalstar is one of the original commercial satellite ventures, first launched in 1991 to provide high-speed space-based communications. The company has been through a lot of iterations, restructurings, and ownership shifts in the years since, but its business is still focused on selling capacity on its constellation of low-orbit satellites.

A satellite in orbit over a cloudy earth.

Image source: Getty Images.

In recent months, the company has become popular with the Reddit WallStreetBets community, and in June, B. Riley analyst Mike Crawford chimed in with an opinion that the stock was indeed underappreciated. Crawford initiated covered with a buy rating and a $3.25 price target, saying the company "at long last" is starting to realize a return on its satellite and spectrum assets.

Crawford said now is a good time to buy in, before "the market digests this change" and warms to Globalstar shares.

Investors took heed. The shares had been down nearly 30% for the month prior to the B. Riley initiation but shot higher in the days that followed.

Now what

Globalstar shares are up nearly 400% year to date, but closed at $1.70 on Friday, still well below Crawford's $3.25 price target.

This is still a niche business, and although it has arguably navigated through some of its most daunting challenges, it should be noted there are still risks involved. But given Wall Street's renewed optimism, and the excitement it has caused, don't be surprised to see this stock continue to be volatile in the months to come.

10 stocks we like better than Globalstar
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

They just revealed what they believe are the ten best stocks for investors to buy right now... and Globalstar wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

*Stock Advisor returns as of June 7, 2021

Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

GSAT

Latest Markets Videos

    The Motley Fool

    Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

    Learn More