Why Did SpaceX Stock Just Pop?

Space Exploration Technologies (NASDAQ:SPCX) stock ripped 4.4% higher through 10:55 a.m. ET Monday after The Washington Post reported over the weekend that Elon Musk's space company "is in talks to buy Boost Mobile or use its network."

What is Elon Musk up to in telecoms?

According to WaPo, SpaceX, which already boasts the world's biggest constellation of broadband satellites in orbit, as well as a large handful of telecommunications satellites offering direct-to-cell communication, is now seeking a "back door into the $235 billion wireless market" down here on Earth.

After being rejected by each of the Big 3 -- AT&T, T-Mobile, and Verizon -- SpaceX is reportedly in talks with EchoStar (NASDAQ:ECHO), the owner of the discount telco Boost Mobile, to buy Boost or partner with it on a new cellphone service using Boost's network. Perversely, Boost itself leases network access from AT&T and T-Mobile, two of the companies that rejected SpaceX's initial overtures.

Hence, the "back door."

Is the rumor true?

The rumor probably is true. Recall that over just the past month, SpaceX has moved rapidly on its goal of becoming "a major mobile carrier in the U.S." First, SpaceX secured Federal Communications Commission permission to put 15,000 direct-to-cell communications satellites in orbit, vastly expanding its ability to connect cellphones around the world. SpaceX next paid $8 billion to acquire U.S. spectrum licenses from private equity firm Grain Management.

Now, it looks like SpaceX is taking the next step and buying or building an intact terrestrial network on Earth.

The pieces are falling into place. One day soon, Starlink may take its place alongside the Big 3 as America's fourth major mobile communications provider.

Rich Smith has no position in any of the stocks mentioned. The Motley Fool recommends T-Mobile US and Verizon Communications. The Motley Fool has a disclosure policy.