EchoStar Corporation (SATS) saw its shares surge approximately 9.1% to $125.67 during Thursday afternoon trading, as investor enthusiasm around the upcoming SpaceX initial public offering (IPO) intensified. The satellite and telecommunications company has become a focal point for traders seeking indirect exposure to SpaceX, following a series of significant spectrum transactions between the two firms.
SpaceX is reportedly planning to raise about $75 billion at a staggering $1.8 trillion valuation, with a Nasdaq debut expected on Friday, according to Reuters. The IPO has drawn major institutional interest, with BlackRock reportedly looking to purchase at least $5 billion of the shares, as cited by the Wall Street Journal. The order book closed on Wednesday, though Reuters noted it could not independently confirm the report.
EchoStar's stock movement is closely tied to its spectrum deals with SpaceX. In September, EchoStar agreed to sell its AWS-4 and H-block spectrum licenses to SpaceX for approximately $17 billion, comprising half cash and half SpaceX stock. The deal also includes SpaceX covering about $2 billion in EchoStar debt interest payments through November 2027. Subsequently, in November, EchoStar modified the agreement to sell its unpaired AWS-3 licenses to SpaceX for roughly $2.6 billion in SpaceX stock. These transactions have tightly linked SATS's sentiment to SpaceX's perceived value.
The proxy effect has been volatile. Barron's reported that some investors view EchoStar as a cheaper bet on SpaceX, but cautioned about risks such as profit-taking, demand shifts after SpaceX lists, and the timing of EchoStar receiving its SpaceX shares. TD Cowen analyst Greg Williams recently valued EchoStar at $155 per share.
SpaceX has also garnered analyst attention. Oppenheimer initiated coverage with an “outperform” rating and a $190 price target, roughly 41% above the indicated $135 IPO price. Analyst Timothy Horan described SpaceX as the “only vertically integrated AI company with the required capital, data, LLMs, hardware, manufacturing and engineering talent.” New Street Research set a $165 target, while Morningstar valued SpaceX at $780 billion, less than half its IPO goal.
EchoStar’s balance-sheet moves extend beyond SpaceX. In August, the company agreed to sell 3.45 GHz and 600 MHz spectrum licenses to AT&T for about $23 billion. EchoStar also announced that Boost Mobile will continue operating as a hybrid mobile network operator, leveraging its own cloud-native 5G core alongside AT&T cell sites. The Federal Communications Commission approved these spectrum sales, totaling roughly $40 billion, in May, citing improved nationwide connectivity.
Despite the strategic deals, EchoStar’s core business faces headwinds. First-quarter revenue fell to $3.67 billion from $3.87 billion a year earlier, with a net loss of $146.89 million, though improved from $202.67 million. Pay-TV subscribers dropped by approximately 366,000, and broadband customers declined by about 58,000, while retail wireless added 16,000 subscribers. The company’s inclusion in the S&P 500 in March has increased its relevance to index investors.
EchoStar shares traded on volume exceeding 10.3 million, with a market capitalization near $36.3 billion. The stock moved between $115.98 and $126.58 during the session. Major indexes were mostly higher, with the Dow up 0.54%, the S&P 500 up 0.26%, and the Nasdaq Composite up 0.41%, while the communication services sector dipped 1.8% due to declines in Alphabet and Meta.
