Is Globalstar Inc (GSAT) a Short Squeeze Candidate or a Bear Trap?

The debate over whether Globalstar Inc (GSAT) is a short squeeze candidate or a bear trap hinges on a nuanced interplay of short interest dynamics, technical indicators, and investor sentiment. As the satellite communications sector navigates a post-AI euphoria correction, GSAT's position as a high-short-interest stock with mixed technical signals and limited retail engagement demands closer scrutiny.

Short Interest: A Double-Edged Sword

As of December 15, 2025, GSAT's short interest stood at 3.62 million shares, or 7.26% of its public float, with a days-to-cover ratio of 4.55. This represents a decline from October's 8.11% of the float but remains elevated compared to its peers. For context, the satellite industry's average short interest in Q4 2025 was 6.67%, while competitors like Rogers Communications (2.38%) and Telefonica Brasil (0.35%) exhibit far lower bearish sentiment. GSAT's short interest ratio of 4.55 suggests moderate pessimism, as ratios above 4 often signal potential short squeeze risks. However, the recent drop in short interest-from 8.07% in October to 7.26% in December indicates that short sellers may be scaling back their bets, potentially reducing the likelihood of a dramatic squeeze.

Technical Indicators: Mixed Signals Amid Volatility

GSAT's technical profile is a patchwork of conflicting signals. The Relative Strength Index (RSI) of 48.121 as of December 2025 suggests a neutral stance, while the MACD of 0.76 points to a buy signal. Yet, moving averages tell a different story: the stock price of $61.04 is above its 5, 20, and 50-day exponential moving averages, signaling a bullish trend. However, the 20-day moving average at $63.05 and the 10-day average at $62.93 both suggest sell signals, highlighting short-term volatility.

Bollinger Bands further complicate the picture, with the stock trading above the upper band of $60.03, indicating overbought conditions. Meanwhile, key support and resistance levels at $23.14 and $73.68 suggest a potential range-bound correction. The "golden cross" formed by the 50-day and 200-day moving averages implies strong short-term momentum, but the RSI's neutrality and the MACD line's bearish crossover with the signal line caution against overreliance on bullish trends.

Investor Sentiment: Contrarian Hopes and Retail Apathy

Reddit discussions on GSAT reveal a paradox. While the r/GSAT subreddit remains largely dormant, a r/pennystocks post highlights bullish catalysts, including a $1.1 billion Apple partnership and insider share purchases. These developments could fuel retail optimism, yet the stock's 117% year-to-date surge to a 52-week high of $73.68 has outpaced fundamentals. GSAT's third-quarter revenue of $73.8 million exceeded expectations, but its share price is now deemed 24% overvalued, with risks like insider selling (e.g., the CFO's $952k stake sale) and shareholder dilution casting shadows.

The Contrarian Case: Short Squeeze or Bear Trap?

GSAT's short interest profile and technical indicators present a classic contrarian dilemma. On one hand, the elevated short interest ratio (4.55) and declining short interest (from 8.07% to 7.26%) suggest that short sellers are becoming cautious, potentially setting the stage for a squeeze if the stock breaks above $73.68. On the other, the overbought RSI, bearish MACD crossover, and mixed analyst ratings (ranging from "sell" to "strong buy") hint at a bear trap, where a false breakout could trigger profit-taking by shorts and a subsequent pullback.

The key differentiator lies in GSAT's ability to sustain its recent momentum. If the company can leverage its enterprise satellite IoT expansion and maintain its Q3 revenue trajectory, short sellers may face margin calls. Conversely, if earnings fail to justify the 24% overvaluation, the stock could retest support levels at $23.14.

Conclusion: A High-Risk, High-Reward Proposition

GSAT's investment thesis is a tightrope walk between short squeeze potential and bear trap risks. While the short interest data and technical indicators suggest a moderate case for a squeeze, the stock's overvaluation and mixed fundamentals temper optimism. Investors should monitor short interest trends, key support/resistance levels, and earnings reports for directional clues. For now, GSAT remains a speculative play best suited for risk-tolerant traders with a clear exit strategy.