r/stocks
Echostar, SATS (Basically 80% SPACEX Proxy) Factcheck with Official sources
Author provides official data showing SATS will receive massive cash from AT&T and SpaceX deals, acting as a proxy for SpaceX.
- Massive cash inflows from AT&T and SpaceX deals will cover the $24B debt and provide liquidity.
- Holds ~2% of SpaceX equity, valued at ~$31B, making it a strong SpaceX proxy.
- Additional spectrum assets remain to be sold in the future, providing further upside.
- High interest expense currently exceeds operating profit, leading to net losses.
- SpaceX stock payout is delayed until Nov 2027, introducing time-value and execution risks.
I want to present to everyone here clear facts and analysis on the stock. I am seeing many wrong garbage ai information out there. I am going to link every source here. Let me know if you find any errors
Official Sources:
|Echostar's latest quarterly report|https://ir.echostar.com/news-releases/news-release-details/echostar-announces-financial-results-three-months-ended-march-6|Total Debt - 24B Operation Profit - 400M Interest expense - 561M Net Income - (146M)|
|:-|:-|:-|
|SpaceX Deal Sept 8, 2025|https://ir.echostar.com/news-releases/news-release-details/echostar-announces-spectrum-sale-and-commercial-agreement-spacex|8.5B cash 8.5B SpaceX based on Sept 8, 2025 valuation|
|SpaceX Deal Extended on Nov|https://ir.echostar.com/news-releases/news-release-details/echostar-agrees-sell-full-unpaired-aws-3-spectrum-license|2.6B stock based on same Sept 8, 2025 valuation|
|ATT Deal|https://about.att.com/story/2025/echostar.html|23B ATT deal, will close this month|
Total Debt
24B
Cash
23B from ATT deal set to close this month
8.5 from SpaceX set to close Nov 2027
SpaceX Stock
According to Barron's, https://www.barrons.com/articles/spacex-echostar-stock-spectrum-ed8f7f59, it is worth \~2% of SpaceX's market cap. Priced at 31B with 1.75T SpaceX Valuation.
Other assets:
Echostar has some less valuable Spectrum left, which they intend to sell in the upcoming years. There's no reliable/good source for the valuation of these Spectrum.
https://broadbandbreakfast.com/echostar-aiming-to-sell-remaining-terrestrial-spectrum-by-sept-2028/
Business:
Echostar is a dying business, but it is not losing money. From the financial reports, you will see they are (14B) under last 12 months, but that is almost entirely due to interest expense, which will be retired with ATT Deal. In the latest quarterly earnings, they have 400M operating profit. I expect this to decline as they lose more subscribers. This part of the company is insignificant compared to its SpaceX stock.
Summary and Total Valuations
|31B|in SPACEX stock (assuming 1.75T market cap)|
|:-|:-|
|31.5B|Cash from ATT + SpaceX deals|
|(24)B|Total Debt|
|Unknown|Remaining Spectrum Assets|
|\>0|Echostar Business (positive operating profit)|
In the worst case scenario, assuming the Business and remaining assets are worth 0,
the company is essentially SpaceX + 7.5B cash.
The fundamental valuation in this scenario for Echostar is thus:
31 (SpaceX stock at 135 dollars) + 7.5 = 38.5B, or \~ $132 per share
Assuming 5B Business + assets
$150 per share
Assuming 10B assets
$167 per share
For people who want to invest in SpaceX as proxy, this seems like an undervalued stock that essentially almost entirely SpaceX. It has no net debt, and an almost worthless business. 70-80% of its stock is just its SpaceX shares. We are looking at Yahoo/Alibaba 2.0.
If you look at the Yahoo/Alibaba example, Yahoo's stock traded at a 30% to 40% discount to its Alibaba holdings for years. The market applied that conglomerate discount because Yahoo could not sell or distribute its Alibaba shares without triggering a massive corporate tax liability. Echostar faces the same friction. Even if their SpaceX stake is worth $31B, SATS cannot simply hand those shares to its own investors or liquidate them without corporate capital gains taxes. The no-arbitrage math does not work in practice because the tax drag is built into the holding structure. How do you think they will handle the tax liability on the SpaceX stake?
Corporate taxes are now 20%, so the discount is a lot less, but you are right in that they should be considered.
I bought it when the deal was announced, thinking that it was a compelling play on OTHER people's interest in SpaceX. Have already taken some profit, will sell most/all of the rest depending on how the IPO goes.
By all measures, there is huge interest in SpaceX stock, from both retail and industry.
The risk is will SATS track SpaceX in the short term? In 2014, Yahoo's stock went slightly down after Alibaba's ipo. But if SpaceX demand is huge, I'd imagine people will be investing SATS as well for exposure if SPCX price gets too high.
I'd imagine people will be investing SATS as well for exposure if SPCX price gets too high.
The short interest is around 35% - perhaps people long via private used it as a proxy to hedge their exposure to some degree? No idea how it or SPCX does in the long-term but in the short-term - especially if the IPO does well - I think you could see some short covering.
Word about that cash on current contracts. Most isn’t revenue until service or product delivered and will be recorded as a liability vs free cash flow.
I didn't include any current assets in this analysis, this is cash purely from ATT and SpaceX deals
But that cash isn’t an asset. It’s a prepay which becomes a liability. My point about it not being free cash flow or recognized revenue.
This is fundamental accounting and why you can’t just claim that cash is a benefit. Without knowing when it actually gets recognized.
that cash is equipment sales... It's not a revenue.
This makes no sense. You are assuming people buy SpaceX for logical financial reasons
And what part of about the analysis makes no sense? I'm not telling people to buy SpaceX, just listing out Sats's company facts and concluding it is basically its proxy stock.
Exactly that. It makes too much financial sense. People buy the name, they don't care
How are you feeling after the massive sell off yesterday. I have some calls expiring in July and and down massively after Friday
SpaceX S1 Filling:
The total consideration for the acquisition of EchoStar’s spectrum is approximately $19.6 billion, consisting of (i) approximately $11.1 billion in equity, payable through the issuance of approximately 261.8 million shares of the Company’s Class A common stock at a fixed value of $42.40 per share, and (ii) up to $8.5 billion related to the payoff of designated EchoStar debt, with any shortfall below $8.5 billion to be paid in cash.
https://www.sec.gov/Archives/edgar/data/1181412/000162828026036936/spaceexplorationtechnologi.htm
well, should have exited yesterday on the news. its trading $110-118. where is the $140???
Come on