AST SpaceMobile Inc (NASDAQ:ASTS) shares are trading lower Wednesday morning after Amazon.com Inc (NASDAQ:AMZN) announced a deal to acquire Globalstar, Inc. (NASDAQ:GSAT), a move that appears to be pressuring ASTS as investors reassess the competitive landscape in direct-to-device satellite connectivity.
- AST SpaceMobile stock is under selling pressure. Why is ASTS stock retreating?
Amazon-Globalstar Deal Shakes ASTS Bull Case
The sell-off makes sense because Amazon's agreement to buy Globalstar introduces a much larger and better-capitalized player into the race to connect smartphones directly through low Earth orbit satellite networks.
According to the deal announcement, Amazon plans to combine Globalstar's satellite operations, infrastructure and spectrum assets with its own Amazon Leo network to support consumer, enterprise and government connectivity.
That headline may be sparking concern that AST SpaceMobile could face a tougher path as deep-pocketed rivals scale faster, lock up strategic spectrum and pursue carrier partnerships more aggressively.
Investors may also be rotating out of ASTS on fears that Amazon's entry could compress future market-share expectations and reduce some of the scarcity premium previously attached to pure-play direct-to-cell names.
Analyst Targets Show Mixed Confidence In ASTS
Analyst Consensus & Recent Actions: The stock carries a Hold rating with an average price target of $75.52. Recent analyst moves include:
- Barclays: Underweight (Raises Target to $65.00) (April 9)
- UBS: Neutral (Raises Target to $85.00) (March 4)
- B. Riley Securities: Neutral (Lowers Target to $95.00) (Feb. 13)
ASTS Shares Edge Lower Wednesday
ASTS Stock Price Activity: AST SpaceMobile shares were down 1.11% at $87.59 at the time of publication on Wednesday, according to Benzinga Pro data.
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