Futu Securities APP noted that after the telecommunications company Globalstar (GSAT.US) announced an expanded agreement with its customer Apple (AAPL.US), its stock price rose by 64% in premarket trading on Friday, then narrowed to 45%. According to the updated service agreement, Globalstar has agreed to provide Apple with expanded services through the new mobile satellite service network, including new satellite constellations, more ground infrastructure, and additional global licenses. The expanded mobile satellite service network will be owned by a unit of Globalstar SPE.

Apple will prepay Globalstar in cash, including approved capital expenditures related to the expanded MSS network, including: (1) infrastructure prepayment, up to $1.1 billion, to be provided quarterly during the construction period, Globalstar SPE will use these funds, along with proceeds from the stock sale, to pay the due amounts for the expansion of the MSS network (including but not limited to construction and launch costs); (2) the amount needed for the company to repay its soon-to-be due 13.00% senior notes ('2029 Notes'), infrastructure prepayment and funds for current debt repayment are included in the '2024 Prepayment Agreement'.

Furthermore, Apple has agreed to purchase 0.4 million Class B shares of Globalstar SPE for $0.4 billion, representing 20% of the equity. This amount is expected to be paid around November 5, 2024, subject to delivery conditions.

Globalstar estimates that in the first year following the expansion of satellite services, its total annual revenue will be more than double the 2024 annualized level.