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Globalstar (NYSE:GSAT), Inc. (NYSE American:GSAT), a company specializing in communication services, has announced the approval of significant changes to its stock structure. The announcement comes as the company's stock has shown strong momentum, with InvestingPro data showing a remarkable 77.88% price return over the past six months.
On Monday, the company's majority shareholder, James Monroe III, and his affiliates, who collectively hold approximately 58% of the voting power, consented to a reverse stock split and a reduction in the number of authorized shares.
The reverse stock split will consolidate existing shares of Globalstar's common stock at a ratio between 1-for-10 and 1-for-25, to be determined by the company's CEO or CFO in consultation with the Board. This action will reduce the number of outstanding shares, potentially increasing the per-share market price.
The move comes as the company operates with a moderate debt-to-equity ratio of 1.07, according to InvestingPro data. Concurrently, the company will proportionately decrease its authorized shares from the current 2,150,000,000.
These amendments were endorsed by the Strategic Review Committee of the Board and the Board itself. The exact timing and ratio of the reverse stock split, as well as the specific reduction in authorized shares, will be decided at a future date by the authorized officers, but must occur no earlier than 20 days after a Schedule 14C information statement is distributed to shareholders and no later than December 17, 2025.
The decision to execute these amendments is not obligatory, and they will only be implemented if deemed appropriate by the company's authorized officers and the Board. The information statement on Schedule 14C will be filed with the Securities and Exchange Commission and provided to stockholders of record, in compliance with SEC regulations.
This strategic move aims to optimize Globalstar's capital structure and is part of the company's ongoing efforts to enhance shareholder value. While the company posted revenue growth of 13.58% in the last twelve months, analysts maintain diverse price targets ranging from $0.99 to $5.00, as revealed by InvestingPro data.
The company is based in Covington, LA, and operates under the communication services sector, with a fiscal year ending on December 31. Discover more comprehensive insights and 7 additional ProTips about GSAT with an InvestingPro subscription. The information reported is based on a press release statement.
In other recent news, Globalstar, Inc. has made significant strides in its operations. The company successfully completed its first 5G data call using the Band n53 spectrum, a critical advancement in its technological capabilities. Despite a 13.6% revenue growth year-over-year, the company is currently operating at a loss, with analysts not anticipating profitability this year.
In partnership with Globalstar, Quectel Wireless Solutions has also underscored the potential of their modules to deliver robust connectivity solutions. Furthermore, Globalstar plans to list on the Nasdaq Global Select Market in the first quarter of 2025, alongside a reverse stock split. The company reported a record Q3 revenue of $72 million, a 25% increase from the same period last year, primarily driven by a 28% rise in service revenue.
Additionally, Globalstar secured a 10-year authorization to expand its terrestrial applications in Mexico, following a successful bid in an auction conducted by Mexico's Instituto Federal de Telecomunicaciones. These are recent developments in the company's operations. On the other hand, Apple Inc (NASDAQ:AAPL). is planning to introduce satellite connectivity to its Apple Watch Ultra by 2025, following its investment in satellite service provider Globalstar.
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