SpaceX deal to buy cellular spectrum lifts shares premarket

By Ed Ballard Shares in SpaceX are up sharply premarket after the company reached a deal to buy cellular spectrum licenses in a move to become a major wireless carrier. For SpaceX investors, news came as a relief from disquiet about the bill for its AI ambitions. The stock closed 4% lower yesterday after news that the company had talked to lenders about raising $40 billion to buy Nvidia chips. The new wireless business doesn't even exist yet, but it's already causing market ripples.

Gaining: Tower operators Shares in American Tower REIT (AMT), Crown Castle (CCI) and SBA Communications (SBAC), which own cell towers and lease space to carriers, are gaining premarket. That's because while SpaceX owns satellites, it needs infrastructure on the ground to support a mobile network. S. licenses are in the 800-megahertz band used to provide wireless service from cellphone towers.

Losing: Other wireless carriers Shares in AT&T (T), Verizon (VZ) and T-Mobile US (TMUS) sank premarket. "This is likely to be viewed as negative for wireless carriers, which we have a difficult time arguing against," analysts at KeyBanc Capital Markets wrote. Still, it may take a long time for this competitive threat to arrive, given that SpaceX has only just got permission to launch 15,000 satellites for the new service. This item is part of a Wall Street Journal live coverage event.

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