The Procure Space ETF (UFO), an aerospace and defense fund, saw volumes soar last week after Apple Inc. said its newest iPhone would incorporate satellite technologies.
Last Wednesday’s announcement at Apple’s annual fall technology launch event sent investors into a frenzy to gain exposure to satellite-focused equities. That same day, mobile satellite communications company Globalstar Inc. announced it would partner with the tech giant to operate a satellite-powered emergency SOS service for the upcoming iPhone 14.
Shares then jumped as high as 42% for the Louisiana-based firm after being halted during trading hours on Sept. 7. That same trading bonanza that sent Globalstar soaring also exponentially increased interest in Procure AM’s aerospace-focused fund, UFO. Trading for UFO surged more than 50 times what it was the day prior, Yahoo Finance data shows.
“People may have been trying to play UFO as a way to get exposure to Globalstar, which was halted,” said Andrew Chanin, chief executive officer of ProcureAM. “It looks like during the time that was halted, people started trading UFO, potentially as a proxy.”
Globalstar Inc. is UFO’s second-largest holding, encompassing 5.44% of the fund’s total portfolio, according to ETF.com data. Shares in the satellite communications company were up almost 0.3% in the middle of the trading day in New York. Meanwhile, UFO gained 0.2% during the same time.
Volumes for the company remain elevated compared with this time last month, Yahoo Finance data shows.
Source: Yahoo Finance
“In many cases, Apple has been the leader in smartphones and what they do becomes what the market ends up shifting towards. This could be an early sign that smartphone manufacturers are going to be looking to incorporate satellite connectivity into their products,” Chanin said.
Contact Shubham Saharan at [email protected]