Al Root

Shares of satellite communications provider EchoStar are like the proverbial canary in the coal mine for judging expectations for the most hotly anticipated initial public offering of the year: SpaceX.

Thursday, the Financial Times reported that Elon Musk's rocket company had lined up four bankers for its IPO: Bank of America, Goldman Sachs, JPMorgan Chase, and Morgan Stanley. SpaceX didn't respond to a request for comment. But getting bankers on board is all part of the process, which started unfolding in December, when Musk all but confirmed a 2026 IPO.

EchoStar stock was up 2.4% in midday trading Thursday, at $125.40, reflecting rising investor expectations ahead of the SpaceX IPO. The S&P 500 and Dow Jones Industrial Average were up 0.7% and 0.9%, respectively.

EchoStar stock tracks SpaceX's valuation because, in September, EchoStar announced a deal to sell its AWS-4 and H-block spectrum licenses to SpaceX. Spectrum -- the frequencies over which wireless calls travel -- is a finite resource that every mobile company needs.

As part of the deal, EchoStar got $8.5 billion in SpaceX stock. At the time of the deal, SpaceX was valued at about $400 billion. EchoStar got another $2.6 billion in SpaceX stock by selling more spectrum in November.

The stock has been a windfall for Echostar investors. SpaceX was recently valued at $800 billion in private-market transactions, and IPO valuations around $1.5 trillion have been floated. SpaceX might turn out to be the largest IPO in history, topping the near-$30 billion raised by Saudi Aramco in 2019.

In the past, Musk has eschewed the idea of taking SpaceX public, believing that staying private, away from the pressure of quarterly earnings calls, would give SpaceX the room to pursue projects such as colonizing Mars. Perhaps artificial intelligence changed his mind, as the idea of putting data centers in space is apparently too good to pass up. SpaceX already has a profitable space-based broadband business with Starlink. Orbiting AI data centers would be another application for SpaceX, and the capital from the IPO could kickstart that effort.

"For data centers in space to be viable, you need costs to go down significantly," says Ivana Delevska, founder and chief investment officer of Spear, and portfolio manager of the Spear Alpha exchange-traded fund. That's what SpaceX's huge rocket system Starship is offering. More capacity and full reusability can take launch costs from, say, $3,000 per kilogram to $300/kg.

Lower launch costs and enough launch capacity would give SpaceX significant advantages in developing the space economy, two reasons the company is richly valued.

Write to Al Root at allen.root@dowjones.com

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January 22, 2026 13:14 ET (18:14 GMT)

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