Key Highlights

● SpaceX closed at $162.57 on Friday, up $2.00, after trading as high as $167.18 premarket.

● SpaceX reportedly agreed to buy up to 14 MHz of paired low-band airwaves from Grain Management for about $8 billion.

● The deal needs FCC approval, though the FCC separately approved an expansion of the Starlink satellite network.

● AST SpaceMobile fell $5.97 to $50.97, while Crown Castle and American Tower posted some of the S&P 500's biggest gains.

SpaceX (NASDAQ:SPCX) closed at $162.57 on Friday, October 9, up $2.00 on the Nasdaq Composite, after a deal that rattled the US wireless industry. The company agreed to buy Grain Management's nationwide 800 MHz low-band spectrum, up to 14 MHz of paired airwaves, for about $8 billion in cash, according to a media report.

The stock had been much stronger before the open, trading as high as $167.18 in premarket dealing, before giving back part of that gain during the regular session. It remains comfortably above its $150 IPO price.

Elon Musk called it a "Very big deal" in a post on X on Thursday. SpaceX said the purchase "will pave the way for Starlink Mobile to become a major mobile carrier in the US."

The regulatory hurdle

The key step now is approval from the Federal Communications Commission. Spectrum transfers of this size require FCC sign-off, and the agency will review how the airwaves would be used and what the deal means for competition in mobile service.

SpaceX did get some regulatory good news on the same day. The FCC approved an expansion of its Starlink satellite network, one of several catalysts cited for the stock's rise. That approval is separate from the spectrum deal, but it shows the company's space-based plans continuing to advance.

Low-band spectrum is valuable because it travels long distances and penetrates buildings well. Pairing it with Starlink's satellites could give SpaceX a stronger hand in mobile service. Evercore ISI analyst Kutgun Maral said, "This strategic shift places SpaceX in a stronger negotiating position."

Carriers hit, towers rally

The reaction elsewhere was dramatic. T-Mobile (NASDAQ:TMUS), AT&T (NYSE:T) and Verizon (NYSE:VZ) lost about $39 billion in combined market value, according to market data. AT&T closed at $22.17, down $2.41, Verizon at $41.65, down $3.99, and T-Mobile around $148.58, down about $22.76. "The carriers' best argument just got weaker," Maral said, adding: "The implications for AT&T, T-Mobile, and Verizon are somewhat negative".

Tower companies surged as investors bet SpaceX would need ground infrastructure. Morgan Stanley (NYSE:MS) analysts called the deal "incrementally constructive" for towers, and Crown Castle (NYSE:CCI) and American Tower (NYSE:AMT) posted some of the S&P 500's biggest gains. AST SpaceMobile (NASDAQ:ASTS), a direct-to-phone satellite rival, fell $5.97 to $50.97.

Analyst support

Barclays (NYSE:BCS) analyst Anthony Valentini started coverage of SpaceX with an Overweight rating and a $254 price target, some reports describing the call as a Buy. The initiation came as part of a broader launch of aerospace and defense coverage that also included Rocket Lab (NASDAQ:RKLB) and Palantir (NASDAQ:PLTR).

The broader market was firm. The Nasdaq Composite rose 172.83 points to 27,366.17, the S&P 500 added 46.18 points to 7,811.54, and the Dow gained 423.31 points to 51,654.95. Communication services was the S&P 500's weakest sector, dragged down by the carriers.

The FCC Review and Verizon's First Carrier Response Set the Pace for Starlink Mobile

US stocks trade on Monday, October 12, while the Bond Market is closed for Columbus Day. On the macro front, September consumer prices arrive on Wednesday, October 14, bank Earnings run from October 13 to 16, and the Fed meets on October 27 and 28. The FCC review of the Grain spectrum purchase is the main event for Starlink Mobile, and any timetable or conditions will be closely watched by SpaceX holders and the carriers alike. Verizon's third-quarter call on October 26 should give the first big-carrier response in an earnings setting.