- A year after sparring with SpaceX at the FCC, EchoStar's shares are soaring skyward
- Analysts increasingly view EchoStar as a de facto “tracking stock” for SpaceX success
- But EchoStar's lucrative spectrum deals with AT&T and SpaceX are still up in the air, pending FCC approval and facing tower vendor pushback over unpaid bills
What a difference a year makes. Last April, Elon Musk’s SpaceX was complaining to the Federal Communications Commission (FCC) that Charlie Ergen’s Dish Network was barely using licensed spectrum to provide 5G and that some of the spectrum should be made available to satellite players like SpaceX. Shares in Dish parent company EchoStar languished at around $22.
The FCC launched an investigation into Ergen’s company and talk of a potential Chapter 11 bankruptcy soon followed. In June, Ergen met with President Donald Trump, who reportedly ended the meeting by encouraging Ergen and FCC Chairman Brendan Carr to work together and reach some kind of deal.
By August, AT&T agreed to buy 3.45 GHz and 600 MHz spectrum licenses from EchoStar for about $23 billion in cash. Shortly thereafter, SpaceX decided to buy EchoStar’s 2 GHz/AWS-4 spectrum for $17 billion, consisting of a mix of cash and SpaceX stock. In November, SpaceX added to its spectrum war chest with another deal to buy EchoStar’s unpaired AWS-3 licenses for about $2.6 billion in SpaceX stock.
Today, EchoStar’s shares are trading around $125, up more than 400% over the past year, and Ergen’s net worth is about $20.1 billion.
EchoStar is the focus
Why all the hubbub over EchoStar?
Privately-held SpaceX is targeting a valuation of $1.75 trillion in its upcoming initial public offering (IPO). The IPO could raise $75 billion, which would make it the largest IPO Wall Street has ever seen. SpaceX currently values itself at more than $1 trillion, according to the New York Times.
“Every day there appear new headlines about SpaceX’s valuation which seem ever higher by a few hundred billion (really, what’s a few hundred billion among friends?). These reports (based on what?) are launching (sorry) the SpaceX stock into orbit while the confidential S1 filing quietly bakes well ahead of an IPO reportedly slated for June,” New Street Research analyst David Barden wrote in a note for investors today.
Bottom line: EchoStar’s fortunes are now closely tied to SpaceX since it launched the EchoStar Capital division in November. EchoStar Capital is the entity responsible for investing new capital from the spectrum transactions. Hamid Akhavan is CEO of EchoStar Capital, while Ergen runs the day-to-day operations of EchoStar Corporation as its chairman and CEO.
This is happening as EchoStar’s other businesses are struggling. Its wireless business, which is mostly Boost Mobile, lost about 9,000 subscribers in Q4 2025. The company ended Q4 with 7.51 million wireless customers.
Analysts now view EchoStar as a proxy for SpaceX’s next phase, with some analysts calling it essentially a “tracking stock” for SpaceX, although it’s not technically so.
Long-time Wall Street equity research firm MoffettNathanson recently dropped coverage of EchoStar, saying “its ongoing operations are no longer of material importance to its stock performance.”
EchoStar not paying vendors
While EchoStar’s spectrum transactions still await regulatory approvals, EchoStar last year started telling its tower and other network construction vendors that it’s not going to pay them, in part because of what it calls a “force majeure” event that was spurred by the FCC’s investigation into its spectrum holdings.
Tower and other contractors are urging the FCC not to approve the spectrum transactions unless they have stipulations that EchoStar pay its vendors.
Meanwhile, Bloomberg today reported that Ergen stands to gain even more through his use of a niche estate-planning tool that could allow him to pass along more than $7.5 billion in stock to his heirs – tax-free.
Through something called grantor retained annuity trusts (GRATs), Ergen’s heirs are positioned to save about $3 billion in taxes at the top rate of 40%, according to the Bloomberg analysis.