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

(END) Dow Jones Newswires

January 29, 2025 12:19 ET (17:19 GMT)

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