Globalstar Satellites Have a New Leader: Qualcomm's Ex-CEO Paul Jacobs

While it has operated a constellation of satellites for decades,
Globalstar
has struggled to turn a profit and rise above the level of a penny stock. Judging by moves in its share price, some investors think that could change.

The voice and data network (ticker: GSAT) revealed a new strategy this week. It replaced its leaders with a team of veterans from the wireless chip maker
Qualcomm
(QCOM).

Globalstar’s shares are up 40% to $1.50 since a Tuesday announcement that the company’s new chief executive is Paul Jacobs, the 60-year old former CEO of Qualcomm. Jacobs led Qualcomm from 2005 to 2018, as chief executive and then board chairman, before leaving after an unsuccessful attempt to take the company private. Qualcomm was founded by his father, Irwin Jacobs.

Speaking with Barron’s on Thursday, Paul Jacobs said he was drawn to Globalstar by its combination of space and land wireless spectrum, a phone partnership it has with
Apple
(AAPL), and its opportunities for linking vehicles and industry.

“Globalstar has got a chunk of spectrum that’s very well-suited to small devices,” he said. Its wireless spectrum is available globally, so devices wouldn’t need different radio components as they travel the world.

It is an inspiring vision. Barron’s has put space stocks on its cover a number of times in the past few years, but the space industry has provided more exhilaration than profit.

Globalstar began in the 1990s as a joint venture between Qualcomm and the defense electronics firm Loral. Jacobs’ father placed the first phone call over the satellite network in 1998.

It has been a struggle ever since. After a 2002 bankruptcy filing, Globalstar came public in 2006. It has lost more than $2 billion offering mobile voice and data services like the SPOT emergency signal device, which has allowed the rescue of more than 9,500 hikers and boaters. The satellite service turned a small operating profit in the June 2023 quarter, but trails far behind its rival
Iridium Communications
(IRDM) in revenue and earnings.

Paul Jacobs brings to Globalstar a team of wireless scientists and engineers who worked with him at Qualcomm, and then at a venture called XCOM. Globalstar is licensing some XCOM technologies that Jacobs says can move large amounts of data through small chunks of wireless spectrum. That could help Globalstar participate in the “Internet of Things” that would knit cars and other moving things more tightly with the internet, said Jacobs.

Globalstar has capital to pursue such ambitions, thanks to a $250 million prepayment Apple made this year in a partnership that is providing emergency messaging services for new iPhones. Those funds will help upgrade the system’s satellite and terrestrial technologies.

Jacobs said that Globalstar’s system can evolve more easily than other legacy satellite networks, because all of its signal processing takes place on the ground—with its satellites simply bouncing back signals like mirrors. Compared with newer satellite systems like OneWeb,
Viasat
(VSAT), or the Starlink service of SpaceX, the Globalstar technology is better suited for small, mobile devices, said Jacobs.

He said that Globalstar’s most overlooked attribute is its ownership of both satellite and terrestrial wireless spectrum. “Our team has a long history of taking underappreciated spectrum and using technology to make it valuable to customers,” Jacobs said.

Write to Bill Alpert at [email protected] and Al Root at [email protected]

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