Shares of Canadian satellite manufacturer MDA Space Ltd. MDA-T sank nearly 16 per cent Thursday, after reports about a potential U.S. deal involving one of its clients spurred fears that MDA could lose a major contract.

In February, MDA announced it had signed $1.1-billion contract with U.S. telecommunications company Globalstar Inc. GSAT-A to build satellites for its planned low-Earth-orbit constellation.

But on Thursday, Bloomberg reported that Globalstar is exploring a potential sale and has held early talks with Elon Musk’s SpaceX , citing confidential sources.

SpaceX, as a vertically integrated company, has its own satellite manufacturing capabilities.

Starlink sets sights on delivering direct-to-consumer satellite phone service

“This is perceived as negative for MDA, given

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