Update: MDA Space Jumps 12% as It Signs a $1.1-Billion Contract with Globalstar to Build Satellite Constellation

MDA Space (TSX: MDA) on Monday signed a $1.1 billion contract with Globalstar to be the prime contractor for the U.S.-listed satellite operator's next-generation low Earth orbit (LEO) satellite constellation.

As part of the contract, MDA Space will manufacture more than 50 MDA AURORA software-defined digital satellites for Globalstar.

The contract is a follow-on to an initial Authorization to Proceed contract with an undisclosed customer in November 2023.

A contract value of about $750 million will be added to the company's backlog in the first quarter of fiscal 2025. This is in addition to the ATP value of about $350 million previously added to the backlog.

Globalstar said Friday that it plans to enact a one-for-15 reverse stock split, effective Monday, and transfer its stock listing to the Nasdaq Global Select Market from the NYSE American.

The transfer will be effective at the close of trading on Tuesday.

Tech stocks were mixed late Wednesday afternoon with the Technology Select Sector SPDR Fund (XLK) falling 0.9% and the SPDR S&P Semiconductor ETF (XSD) adding 0.6%.

The Philadelphia Semiconductor index increased 0.1%.

In sector news, Chinese startup DeepSeek's AI chatbot isn't revolutionary enough to upend the western AI industry as the total addressable market for AI compute is still expected to double in the long term, BofA Securities said.

In corporate news, officials in the Trump administration are considering additional curbs on the sale of Nvidia chips to China, Bloomberg reported. Nvidia shares fell 5.1%.

Manhattan Associates shares tumbled 25% as 2025 earnings and revenue guidance trailed estimates by analysts after Q4 results topped expectations.

Globalstar and AST SpaceMobile shares tumbled following reports about connectivity support from Apple (AAPL) and T-Mobile US (TMUS) for SpaceX's Starlink satellite internet network. Globalstar fell 18%, and AST dropped 12%.

Microsoft-backed OpenAI said it has evidence that Chinese AI startup DeepSeek used the San Francisco-based company's AI models to train its offering in a possible infringement of OpenAI's intellectual property, the Financial Times reported. Microsoft shares fell 1.1%.

Globalstar and AST SpaceMobile shares tumbled Wednesday, following reports about connectivity support from Apple and T-Mobile US for SpaceX Starlink satellite internet network.

Globalstar was down more than 19%, while AST SpaceMobile fell 12% in recent trading.

Apple, T-Mobile and SpaceX were working behind the scenes to add support for the Starlink network in the latest iPhone update, Bloomberg reported.

The companies did not immediately reply to MT Newswires' requests for comment.

By Adriano Marchese

Shares of MDA Space tumbled Wednesday after a report by Bloomberg said Apple's iPhones can now test SpaceX's Starlink's direct-to-device satellite service, stoking fears that this might affect MDA's "mystery client."

Shares traded nearly 14% lower at 23.35 Canadian dollars ($16.21).

A Bloomberg report Tuesday said some T-Mobile users with iPhone devices are now eligible to test Starlink's direct-to-cell capability, giving them the ability to send text messages by way of satellite.

BMO's Thanos Moschopoulos noted in a report that MDA has been working with a "mystery client" on a $300 million authorization-to-proceed contract for a Low Earth Orbit satellite constellation project. He said the client is widely believed to be Apple and Globalstar, another satellite network company. MDA has kept the customer unidentified.

MDA said in an email that it doesn't comment on rumor or speculation.

The analyst added that while it is possible that Apple may decide in the future to rely on Starlink for its own satellite services, he doesn't believe investors should jump to the conclusion that the Apple and Starlink news is an indication that Apple is planning to opt out of its own constellation plans.

According to the Bloomberg report, at first the service was only for certain Android smartphones on the T-Mobile service, but T-Mobile has expanded the list to include iPhone devices with the latest operating system.

Moschopoulos said the stock drop is unwarranted, and that this development shouldn't affect MDA's forecasts in fiscal 2025 and 2026. "In our view, the recency of Apple's $1.5 billion investment in Globalstar, announced in November, suggests that Apple remains interested in investing in its own satellite infrastructure," he said.

Write to Adriano Marchese at adriano.marchese@wsj.com