SpaceX Fans Find a Proxy—in EchoStar
SpaceX’s upcoming IPO may be one of the most anticipated public debuts of the year. But some investors have already figured out a way to get exposure to SpaceX—via EchoStar!
The satellite telecommunications company last fall struck a series of deals to sell wireless spectrum rights to SpaceX in exchange for $8.5 billion in cash and $11.1 billion in SpaceX stock. Once the deal closes next year, EchoStar will own a significant chunk of SpaceX, while SpaceX will use the spectrum for its next generation of Starlink direct-to-cell mobile service. The SpaceX stake will be one of EchoStar’s most important assets (EchoStar also owns Boost Mobile and Dish Network, neither of which has set the world on fire).
Shares of EchoStar have skyrocketed more than 300% since last August, when the company began selling off its spectrum (starting with a deal with AT&T). While the rally may reflect relief that EchoStar would survive—it had looked to be on the verge of bankruptcy before it did the deals with SpaceX and AT&T—some of the enthusiasm almost certainly reflects its newfound exposure to Elon Musk’s company.
In fact, EchoStar is so popular that it was added to the S&P 500 index on Monday morning.