Amazon.com Inc AMZN agreed to acquire Globalstar Inc GSAT for $11.57 billion, snatching a satellite company that Elon Musk’s SpaceX had tried to buy itself just months earlier.
Amazon Outbid SpaceX
Amazon beat out SpaceX for Globalstar, securing spectrum and satellite infrastructure that strengthens its position in both broadband and direct-to-device connectivity.
SpaceX has roughly 10,000 Starlink satellites in orbit. Amazon has around 200, but is planning $200 billion in capex this year and targeting 3,200 satellites by 2029.
The deal is already sending ripples through the satellite sector. Viasat Inc VSAT has surged nearly 600% in the past year, Iridium Communications IRDM is up about 50%, and hedge funds are circling both as potential takeover targets as companies race to lock up scarce spectrum.
FCC Chairman Brendan Carr told CNBC the agency is “very open-minded” to the deal. BNP Paribas analyst Nick Jones called it a strategic positive for Amazon.
Bezos Is Competing On Every Front
Jeff Bezos’ Blue Origin took the opposite approach to SpaceX.
Where Musk moved fast and blew up rockets to iterate, Bezos went slow and methodical. It paid off last year when Blue Origin’s New Glenn rocket reached orbit on its first attempt. It may launch again Friday.
Both companies have NASA contracts to build crew landers, but SpaceX fell behind schedule and NASA reopened the competition, whichever lander is ready first may fly first.
On the commercial side, Amazon is starting to chip away at Starlink’s customer base.
Delta Air Lines DAL picked Bezos over Musk for satellite Wi-Fi on 500 aircraft. Amazon CEO Andy Jassy said LEO already has commitments from JetBlue, AT&T, Vodafone, and NASA.
Why It Matters For The IPO
SpaceX is targeting a $1.75 trillion valuation. Starlink is estimated to contribute between 50% and 80% of the company’s revenue. That makes the satellite business the centerpiece of any IPO pitch, and Amazon is signaling it intends to compete directly in both broadband and direct-to-device.
Polymarket traders currently give SpaceX a 46% chance of completing their IPO by the end of June and 91% by the end of September. The closing market cap contract prices the most likely outcome between $1.5 trillion and $2 trillion at 39%.
If Amazon’s satellite push starts eating into the monopoly narrative, SpaceX’s valuation could drift lower before Musk even starts the roadshow.
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This article Amazon Vs. SpaceX Space Race Heats Up At Difficult Time For Musk's Upcoming IPO originally appeared on Benzinga.com.
