Straight Path Deal May Trigger More Spectrum Buyouts (STRP, T, VZ)

Straight Path Communications (ticker: STRP) shares jumped more than 150 percent this week when the company announced a $1.6 billion buyout by AT&T (T). While the buyout was certainly great news for Straight Path investors, it could also up the potential buying price for other Wall Street spectrum plays, such as Dish Network (DISH) and Globalstar (GSAT).

AT&T was after Straight Path’s 28 gigahertz and 39 GHz millimeter-wave spectrum, an asset that could play a critical role in the coming 5G network wireless service war. AT&T is gearing up for fierce 5G competition with rivals Verizon Communications (VZ) and T-Mobile (TMUS) in coming years. Straight Path was AT&T’s second major spectrum acquisition of 2017. In January AT&T acquired FiberTower Corp. in response to Verizon’s buyout of XO Communications.

Now that the Straight Path deal has been announced, Wall Street analysts are looking for companies that could be the next major spectrum buyout.

“We anticipate further acquisitions leading up to the commercial deployment of 5G wireless broadband,” Height Securities wrote in a new research note. The firm names Globalstar, Ligado Networks and Dish Network as the primary targets.

Chardan Capital Markets analyst James McIlree also says Globalstar is a top target.

“Globalstar’s 2.4GHz spectrum is a fair distance from Straight Path’s, with significantly different propagation characteristics, so a direct price per MHz-POP comparison is not relevant. However, we do believe the Straight Path purchase highlights the scarcity value of spectrum,” McIlree says.

Other analysts say Globalstar and Dish Network aren’t on the same level as Straight Path in terms of spectrum quality.

Kerrisdale Capital analyst Sahm Adrangi says that each spectrum play is unique and Globalstar’s spectrum will not be appealing to potential buyers.

Barclays analyst Amir Rozwadowski is skeptical of the value of Dish Network’s mid-band spectrum as well.

“While mid-band spectrum that DISH primarily owns has value, we are now seeing carriers increasingly focusing on high band spectrum as they prepare for a 5G world,” Rozwadowski says.

Globalstar shares initially spiked…

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