MW EchoStar's business deemed 'irrelevant' as investors focus on future SpaceX stake

By William Gavin

The satellite-communications company is essentially a hedge fund with a SpaceX stake, in the view of MoffettNathanson analysts

EchoStar, which owns Dish TV, is increasingly seen as a way to invest in Elon Musk's SpaceX, which aims to become a public company as soon as this summer.

EchoStar's main businesses are becoming "irrelevant," making the Dish satellite-TV parent essentially a "space-themed" hedge fund, analysts said Monday in a blunt report.

"EchoStar's $(SATS)$ valuation now depends on the market's assessment ofSpaceX, the expectation for investment returns on investments that haven't even been made yet," and regulatory decisions, MoffettNathanson analysts wrote in a note to clients.

EchoStar has agreed to sell about $20 billion worth of spectrum to SpaceX - which that company's CEO, Elon Musk, has said will "greatly" increase the addressable market of Starlink, its satellite-internet business. The agreement, which is subject to regulatory approval, is due to close by November 2027.

As part of the deal, SpaceX agreed to pay EchoStar up to $11 billion worth of its class A common stock. That has investors viewing the company as a potential way to benefit from SpaceX's upcoming initial public offering.

When EchoStar made its deal with SpaceX, the aerospace firm was worth $400 billion. Following its acquisition of Musk's xAI, it's now estimated to be worth $1.25 trillion.

SpaceX aims to file confidentially for an IPO as soon as this month, according to Bloomberg, keeping it on pace for a June listing. The company could seek a valuation of more than $1.75 trillion, Bloomberg reported.

Meanwhile, for EchoStar, "the bulk of its value is cash to be re-invested rather than returned," said the MoffettNathanson analysts, who rate EchoStar's stock at neutral with a $64 price target, reflecting downside of about 43%.

During a call with analysts on Monday, EchoStar executives noted that they have a right to equity in SpaceX, but that they don't actually have a stake yet.

"They've been the best company I've ever worked with in 45 years," EchoStar CEO Charles Ergen said, according to a transcript. "I don't think any amount of valuation is probably crazy there."

He said that EchoStar isn't privy to SpaceX's valuation and invested on "faith" in the company, adding: "I'm anxious to see if they do, in fact, do an IPO."

EchoStar's stock has surged more than 281% over the last 12 months. That includes a 76% gain since the deal with SpaceX was announced. The stock was up about 2% midday Monday.

The company warned in its annual report filed on Monday that investor expectations around the potential investment in SpaceX are influencing the stock. If public perception of SpaceX takes a turn for the worse, or if the deal is scrapped, EchoStar said its stock price could be "materially and negatively" impacted.

EchoStar on Monday reported fourth-quarter year-over-year declines in revenue and net income as the company continued to bleed subscribers.

Revenue came in at $3.79 billion for the December quarter, down from $3.96 billion a year earlier but above the $3.76 billion expected by analysts, according to FactSet data. It reported a net loss of $1.2 billion, compared with net income of $335 million a year earlier.

Now read: AT&T's earnings impress as subscriber growth booms and the stock jumps

The company said it ended December with 168,000 fewer pay-TV subscribers, 9,000 fewer retail wireless subscribers and 44,000 fewer broadband customers. The company's pay-TV division, its biggest business, ended 2025 with just shy of 7 million subscribers, down from more than 7.7 million a year earlier and 8.5 million in 2023.

EchoStar also recorded a net loss of $14.5 billion in 2025, compared with a loss of $119.55 million a year earlier, "primarily attributable to non-cash asset impairments and other expenses totaling approximately $17.63 billion."

Most of that can be traced back to EchoStar's decision to abandon and decommission part of its 5G network as it switched to a hybrid mobile-network operator model following its deals to sell spectrum to SpaceX and AT&T $(T)$ in the third quarter.

EchoStar has "fully migrated" its 5G network to AT&T, Citi analysts led by Michael Rollins said in a note to investors on Monday. That could mean stronger wholesale revenue for AT&T in the current quarter, he added.

EchoStar, through its Dish Wireless business, is also being sued by several companies, including a division of Comcast $(CMCSA)$, for not paying them under agreements tied to its 5G network. EchoStar has said it was effectively forced to sell its spectrum by U.S. regulators and is no longer obligated to pay for infrastructure it doesn't need.

In legal filings, Crown Castle $(CCI)$ has alleged that Dish "invented" a "feeble" excuse to avoid its obligations. Another plaintiff, Royal Group Plaza, accused Dish of making a "calculated and baseless attempt to escape" paying up.

"We don't believe we owe any money," Ergen said on the call with analysts, according to a transcript.

Read: Amazon wants to be a satellite powerhouse. For now, the effort is a financial black hole.

-William Gavin

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

March 02, 2026 13:12 ET (18:12 GMT)

Copyright (c) 2026 Dow Jones & Company, Inc.