OCC moved the Amazon-Globalstar deal into a much more practical phase for options traders on August 31, 2026. Memo 59685 says standard GSAT options are expected to become AMZN2 if the merger is consummated, and memo 59686 says the already-adjusted GSAT1 series is expected to become AMZN1.
That matters because this is no longer just a headline merger-value story. OCC is now telling the market how listed options will map into a deal where shareholders can elect cash or Amazon stock, cash elections are capped and prorated, and the adjusted option deliverable is tied to the non-electing consideration rather than to whatever election an individual holder hoped to make.
This article is for market commentary and options education only. It is not financial advice, investment advice, trading advice, or a recommendation to buy or sell any security or options contract. Options involve risk, including liquidity risk, assignment risk, and corporate-action settlement risk. Review the site risk disclosure.
What OCC and the SEC actually confirmed
The cleanest way to read this event is to separate shareholder elections from listed-option treatment.
First, OCC memo 59685 says the total number of Globalstar shares eligible to receive cash cannot exceed 40 percent of the shares outstanding immediately before the merger closes. Shareholders may elect cash, elect Amazon stock, or make no election. The memo also says the election deadline is expected to be 5:00 p.m. New York City time three business days before the anticipated closing date, unless Amazon and Globalstar agree otherwise.
Second, the August 18, 2026 Globalstar / Amazon information statement-prospectus filed with the SEC says each Globalstar share converts into either USD 90.00 in cash minus any per-share adjustment or a formula-based amount of Amazon stock, with the cash side subject to proration if it is oversubscribed. The same filing says stockholders who do not make a valid and timely election will be treated as electing the stock consideration. It also says the stock exchange ratio depends on Amazon’s 20-trading-day VWAP ending two trading days before closing, with the formula changing around an Amazon measurement price of USD 280.38.
Third, the SEC filing says supporting stockholders representing about 57.6 percent of Globalstar’s voting power already delivered a written consent on April 13, 2026, so no further stockholder vote is required to adopt the merger agreement. That is an important distinction from merger stories where options traders still have to map a visible shareholder-vote date.
Fourth, OCC says the contract adjustment is expected to become effective at the opening of the business day after the merger is consummated, and that adjustment is expected in 2027 rather than immediately.
Why the options lesson changed
The key shift is that the options deliverable is not based on your personal preferred election.
Memo 59685 says the new AMZN2 deliverable for standard contracts will be based on the merger consideration that accrues to non-electing Globalstar holders, stated on the current 100-share contract basis. OCC also says AMZN2 settlement will be delayed until the non-electing consideration is determined.
That makes this a contract-handling story, not a simple merger-arbitrage shortcut. A trader can read the headline and assume “cash or stock, up to me.” The listed option does not work that way after adjustment. Once the merger closes and the contract changes root, exercise and assignment run through the non-electing package that OCC specifies for the listed contract.
The adjusted-root side matters too. Memo 59686 covers GSAT1, the already-adjusted series from Globalstar’s earlier capital-structure changes, and says those contracts are expected to move to AMZN1. Traders should not assume AMZN1 and AMZN2 are interchangeable just because both are tied to the same merger. One is the standard root’s successor; the other inherits an older adjusted-contract history.
Why it matters for options traders
1. Cash elections are capped, so “I elected cash” does not mean “I get only cash”
The 40 percent cap is the first practical issue. If more holders elect cash than the merger allows, the cash consideration is prorated. That means the residual stock component is not some edge case. It is part of the base mechanics traders need to expect if the cash election is popular.
For options traders, that matters because a merger contract with a capped cash pool does not behave like a plain all-cash takeout. The final economic package depends on election mix, proration, the stock formula, and any per-share adjustment in the merger documents.
2. The adjusted listed contract is tied to non-electing consideration
This is the most important point in the memo set. OCC says the new deliverable is based on the consideration that accrues to non-electing holders. That means a listed option holder who waits until after the contract is adjusted no longer has a clean path to choose among the merger alternatives through the option itself.
In other words, the listed contract and the shareholder election process are connected, but not identical. That is where many traders get sloppy in election mergers.
3. Delayed settlement introduces a real operational phase
OCC says it will delay settlement of AMZN2 options until the non-electing consideration is determined. That should immediately tell traders this is not an ordinary one-security equity option once the adjustment goes live.
If you want a nearby comparison, the site recently covered how OCC mapped Dominion options into NEE1 with delayed settlement ahead of the Sept. 3 merger vote and, earlier in the summer, how ABNY and ABNY1 moved into delayed settlement during a fund liquidation. The Globalstar case is a different corporate action, but the practical lesson is similar: once settlement timing and deliverable definition become conditional, routine-looking options can stop behaving routinely.
4. Exercise timing matters before the adjustment, not after
OCC makes this explicit. Holders of GSAT calls who want to receive shares and make their own merger election bear sole responsibility for exercising early enough to satisfy the election procedures and valid-delivery requirements. After the merger is consummated and the contract adjustment takes effect, the options no longer deliver GSAT shares upon exercise. They deliver the non-electing merger consideration on a per-contract basis.
That is the practical deadline embedded in the memo. If a trader wants shareholder-style election flexibility, the decision has to be made before the root changes and early enough for valid share delivery. Waiting until after the adjustment means the contract is already pointing somewhere else.
5. Uncovered call writers face more than ordinary assignment math
Memo 59685 also flags NSCC protect and liability procedures around elections and cut-off times. OCC warns that uncovered call writers who wait until after assignment to source deliverable securities may fail to make timely delivery and still face protect-related liability.
That is not a directional opinion. It is a settlement-process warning. Traders short calls into an election merger need to think about assignment logistics, not just whether the merger spread looks small.
Readers who want the mechanics refresher should review options expiration, assignment, and exercise explained, early assignment risk in options trading: when and why it happens, and cash-settled vs physically-settled options explained.
What is still uncertain
Several details still need to be treated as conditional rather than fixed.
- The option adjustment takes effect only if the merger is consummated.
- OCC’s memo says the contract adjustment is expected in 2027, so the timing is not immediate.
- The exact non-electing consideration must still be determined before delayed settlement ends.
- The stock consideration depends on Amazon’s measurement-price formula at closing, not on a fixed stock count today.
- The SEC filing says a customer-payment mechanism tied to operational milestones can reduce the value of both the cash and stock consideration on a per-share basis, so the headline
USD 90.00figure is not a pure unconditional cash promise.
That last point matters because traders often anchor too hard to the round number in a merger headline and forget the adjustment language underneath it.
What traders may misunderstand
“This is an all-cash merger with a stock backup”
No. The SEC filing and OCC memo both describe a genuine election structure with a hard cap on aggregate cash elections and a formula-based stock alternative. Oversubscribed cash elections are prorated.
“If I hold calls through the adjustment, I can still choose cash or stock later”
Not the same way. OCC says post-adjustment exercise delivers the non-electing merger consideration. Traders who want to receive shares and try to make their own election have to manage exercise timing before the contract changes.
“AMZN2 and AMZN1 should trade the same”
Not necessarily. Standard and adjusted roots can have different deliverable histories, different liquidity, and different quoting behavior even when they sit inside the same corporate-action family.
“A merger spread that looks narrow means the options are easy”
No. Election mechanics, delayed settlement, assignment timing, and protect procedures can matter more than a simple spot-to-headline-value spread once the options move into the adjusted phase.
If you need the broader framework for handling path-dependent setups, risk management in options trading: position sizing and probability is the better starting point than any single merger headline.
Bottom line
OCC memos 59685 and 59686 move the Amazon-Globalstar story into a clearly different options phase. Standard GSAT contracts are expected to become AMZN2, adjusted GSAT1 contracts are expected to become AMZN1, cash elections are capped at 40 percent, and the listed-option deliverable is tied to the non-electing merger consideration with delayed settlement until that consideration is fully determined.
For options traders, the useful takeaway is not a trade call on GSAT or AMZN. It is that election mergers can create a gap between shareholder choice and listed-option treatment. Once that gap matters, exercise timing, assignment handling, proration, and settlement mechanics deserve more attention than the headline merger value alone.
This article is for market commentary and options education only. It is not financial advice, investment advice, or trading advice.
Sources
- OCC Information Memo
59685, August 31, 2026, “Globalstar, Inc. (Election Merger) - Anticipated Adjustment” -https://infomemo.theocc.com/infomemos?number=59685 - OCC Information Memo
59686, August 31, 2026, “Adjusted Globalstar, Inc. (Election Merger) - Anticipated Further Adjustment” -https://infomemo.theocc.com/infomemos?number=59686 - Globalstar / Amazon information statement-prospectus on SEC Form
424B3, dated August 18, 2026 -https://www.sec.gov/Archives/edgar/data/1018724/000110465926098339/tm2617924-6_424b3.htm - Amazon / Globalstar Agreement and Plan of Merger, filed April 13, 2026 as Exhibit
2.1-https://www.sec.gov/Archives/edgar/data/1366868/000114036126014528/ef20070409_ex2-1.htm
