Amazon agreed to acquire Globalstar for $90/share (≈$11 billion) on April 13, 2026. The deal is efficiently priced — 13% arb spread, ≈90% close probability, no edge. The finding is what the deal reveals about satellite spectrum valuations: Iridium (IRDM) is now the last independent global MSS L-band operator, and at $35.49, the stock is approximately fairly valued for the spectrum optionality. The math works at $30-32, not here.

What the Filing Says

The 8-K is three deals signed simultaneously:

Amazon acquires GSAT at $90/share. Cash or 0.3210 AMZN shares (capped at $90). Thermo (57.6% owner) delivered written consent the same day — cannot be blocked. No financing condition. Amazon reverse break fee: $592M. Expected close 2027, extensible to April 2028.

Amazon and Apple sign a separate D2D agreement. Apple committed to Amazon Leo — not SpaceX — as the long-term satellite partner for iPhone Emergency SOS, Messages, Find My, and Roadside Assistance. Amazon Leo launches 2028, entirely new architecture. Amazon is paying $11B for GSAT's globally harmonized MSS spectrum licenses and operational foundation, not the satellite technology.

Apple's 20% SPE equity transfers to Amazon. Apple held 20% of the entity owning the Extended MSS Network assets. At close, Amazon takes 100% ownership, eliminating the default/control risk where Apple could have claimed those assets.

Apple also increased its prepayment by $468M to $1.58B total, funding GSAT through close. HIBLEO-4 satellite delivery (17 sats from MDA Space, which already missed milestones) is a closing condition. Maximum downward price adjustment for missed milestones post-close: $110M (≈$0.86/share).

What the Market Thinks

GSAT ($79.63): The arb desks are on it. ATM call IV crushed to 23.3% (-19th percentile). 10,952 put contracts at the $60 strike — protective hedges against deal break. P/C ratio 1.17. Market prices ≈90% close, consistent with our estimate. There is no gap.

IRDM ($35.49): +42% in one month. RSI 78.1 (overbought). Options P/C ratio 0.02 — 40x calls to puts. 11,435 open interest on $40 May calls. Analyst mean target $30.38, below current — sell-side hasn't incorporated the spectrum comp. Only Barclays ($36, April 9) reflects the new reality.

The implied IRDM acquisition probability depends on where you mark operating value:

• At 12x FCF ($30 operating value): market prices 27.5% acquisition P. Our estimate: 30%. Edge: 2.5%.
• At 14x FCF ($34 operating value): market prices 9.3%. Our estimate: 30%. Edge: 20.7%.

This is a 30-percentage-point range in estimated edge from a 2-turn difference in operating multiple. We don't have unusual insight into which multiple is correct. That IS the finding — the edge is real but unresolvable at this level of precision.

Why the Gap Exists

Sell-side hasn't modeled spectrum optionality. Eight of nine analyst targets predate the GSAT deal. The April 23 earnings call will force the question. Target revisions to $35-42 are a known catalyst, not alpha.

The $/MHz comp requires domain synthesis. Three transactions bracket MSS spectrum value: SpaceX/EchoStar ($19.6B for ≈50 MHz), Amazon/GSAT ($11B for global L/S-band), ASTS/Ligado ($550M for 45 MHz, distressed). At $100-200M/MHz (conservative for IRDM's narrower, narrowband-oriented 8.725 MHz), the spectrum is worth $870M-$1.75B — 23-46% of IRDM's $3.8B market cap. This math is straightforward but the +42% move suggests it's already circulating among informed buyers.

Spectrum separability is the unresolved question. Can Iridium monetize spectrum without selling the entire company? The L-band is operationally tied to a 66-satellite crosslinked mesh serving 130,000+ government endpoints. A carve-out is structurally harder than an outright acquisition. CEO Desch said "alliances" and "unique real estate," not "sale" or "strategic alternatives." If spectrum can only be monetized via full acquisition, the buyer pays operating value plus spectrum premium and shareholders win. If it can be monetized via lease or JV, there's optionality the market isn't pricing. Either path benefits shareholders, but the magnitude differs by 2-3x and the timeline is unknowable.

Risks

1. Entry timing. Probability-weighted EV at $35.49 is ≈6.3% annualized. After risk-free (4.5%) and beta cost (0.48 x ≈10%): alpha is approximately zero. At $30-32 entry, alpha turns positive (+5-10%). At $28, it's +16%. The spectrum thesis is DEMAND-type with 365-day half-life — it decays 0.03%/day. There is no urgency.

2. EMSS contract loss (Sep 2026). $110.5M/yr, 13% of revenue. Filings flag "significant risks." Loss would cut FCF from $318M to ≈$220M, compressing operating value to $25 or below — 30% drawdown. We estimate 75% renewal probability. Golden Dome/government tailwinds favor renewal, but procurement politics are unpredictable.

3. GSAT deal failure (kills the comp). If Amazon-GSAT terminates on regulatory block or satellite delivery failure, the $11B spectrum valuation anchor disappears. IRDM reverts toward pre-deal levels ($22-25). Deal has extension backstop to April 2028 but MDA's track record on delivery is poor.

4. Spectrum abundance. FCC opens new D2D bands or non-licensed D2D solutions emerge. Low probability near-term but would collapse the scarcity premium entirely.

Catalysts

• IRDM earnings April 23 (9 days). Desch's language is the binary. "Strategic alternatives" = stock $40+. Generic update = revert to $32-34. IV at 110-130% confirms market expects a move.
• EMSS decision (by Sep 2026, 6-month extension possible). Binary for the operating value floor.
• MDA HIBLEO-4 delivery (expected H1 2026). 8 of 15 sats through acceptance testing. De-risks GSAT close and preserves the spectrum comp anchor.
• NTN Direct launch (H2 2026). First D2D revenue from IRDM. $5-10M/quarter would validate narrowband L-band commercial value.

What Would Change Our Mind

Desch announces formal strategic review on April 23. P(acquisition) shifts from 30% to 50%+, justifying entry above $35. Alternatively, a second hyperscaler enters the MSS spectrum race — that changes the supply/demand math entirely.

In the other direction: Desch says "committed to operating independently." EMSS lost. FCC proposes new D2D allocations. Any of these kills the spectrum premium and reverts the stock to $28-32 operating value. Amazon-GSAT deal failure eliminates the valuation comp altogether — IRDM to $22-25.

Evidence

Note: The first five rows are from a single 8-K filing, same event. Treated as one signal for the memo-level LR despite individual scoring.