Billionaire Charlie Ergen plays his hand
Making $10bn never hurt so much. Charlie Ergen in the last month has engineered $42bn worth of M&A involving the satellite company he founded, EchoStar.
EchoStar’s market capitalisation has gone from $2bn to $25bn in the past two years, and Ergen himself has captured almost half those gains through his stake in the company. And he really isn’t happy about any of it.
As DD’s Sujeet Indap and the FT’s Jill R Shah report, one of the greatest turnarounds of a distressed company in the history of corporate America has a reluctant protagonist.
Ergen, who founded EchoStar in 1980, spent $40bn trying to stand up his own mobile phone network. But FCC chair Brendan Carr and his boss US President Donald Trump thought Ergen was moving too slowly and “squatting” on all that spectrum. Ergen in the last month then sold $23bn worth of airwaves to AT&T and then more intriguingly, cut a $19bn deal with Elon Musk’s SpaceX.
Shares in EchoStar have gone from $10 each to more than $80 and some of the biggest vulture funds in the world — Silver Point, Redwood and Darsana — have printed hundreds of millions of dollars in profits, alongside Ergen. It appears to be the biggest turnaround, based on dollars gained, since Carvana.
For his part, Ergen doesn’t like being told what to do. But when Trump is beating down your door you have no choice. The former professional poker player had this to say on Monday summing up the lucrative tragedy:
“When you play blackjack, you play the odds, and every hand, there’s a right [or] wrong answer . . . that wasn’t so dissimilar here, where the hand that we’re dealt by the FCC was one that there’s only one logical path that we’re going to be able to take.”