10 months ago
EchoStar Increases SpaceX Stake to $11B; Charlie Ergen Returns as CEO
Imagine a company called EchoStar that sells internet and TV.
They also own a lot of valuable radio airwaves called spectrum.
EchoStar sold some of its airwaves to Elon Musk's company, SpaceX, which builds rockets and satellites.
This sale means EchoStar now owns a small part of SpaceX, which is worth a lot of money, about $11 billion!
They did this because they think SpaceX is doing a really great job with space stuff.
Also, Charlie Ergen, who started EchoStar a long time ago, has decided to be the boss (CEO) again.
He previously stepped back but is now back in charge to help the company.
EchoStar is trying to do new things with wireless services, even though their older TV services aren't growing as much.
SpaceX is considered a top company in space, and some think it might even become a public company in the future, like a stock you can buy.
EchoStar has sold an additional $2.6 billion in spectrum to SpaceX, increasing its stake to about 3%, now valued at $11 billion.
Co-founder Charlie Ergen has returned to the CEO role of EchoStar, the parent company of Dish Network.
EchoStar's Q3 total revenue was $3.6 billion, with net losses widening to $12.8 billion, largely due to impairment charges.
The company's traditional pay-TV and internet-based Sling bundle continue to see shrinking subscriber numbers, though Sling added subscribers in the quarter.
Ergen expressed strong confidence in SpaceX's capabilities and its position as a leader in space exploration.
- Who
- EchoStar, SpaceX, Charlie Ergen
- What
- EchoStar increased its stake in SpaceX to approximately 3%, now valued at $11 billion, through an additional $2.6 billion spectrum sale, while Charlie Ergen returned as CEO of EchoStar.
- Where
- USA
- When
- Announced Thursday, alongside third-quarter results (quarter ended September 30)
- Why
- EchoStar aims to leverage its stake in SpaceX, which is seen as a leader in space exploration, while EchoStar itself navigates a pivot to wireless and faces declining subscriber numbers.
EchoStar's Perspective
Market Context
Spectrum Deal Rationale
EchoStar's Perspective
EchoStar has sold an additional $2.6 billion in spectrum to SpaceX, building on a previous $17 billion deal, to increase its stake and leverage SpaceX's expertise in space ventures.
Market Context
The increased stake and spectrum sales occur as EchoStar faces declining subscribers in its traditional pay-TV and internet services, and as SpaceX is rumored to be preparing for an IPO.
Future Earnings Calls
EchoStar's Perspective
Charlie Ergen suggests that public companies might consider moving away from quarterly earnings calls, citing the continuous preparation required, potentially implying a shift in communication strategy for EchoStar.
Market Context
EchoStar will continue to file quarterly financial reports with the SEC, regardless of whether it holds quarterly earnings calls, adhering to regulatory requirements.
Key facts
- EchoStar's Stake in SpaceX
- Approximately 3%, currently valued at $11 billion.
- Recent Spectrum Sale to SpaceX
- $2.6 billion
- Previous Spectrum Deal with SpaceX
- $17 billion (September)
- Charlie Ergen's Role
- Returned as CEO of EchoStar (Dish Network parent)
- Former CEO Hamid Akhavan's New Role
- CEO of EchoStar Capital (new investment arm)
- EchoStar's Q3 Total Revenue
- $3.6 billion
- EchoStar's Q3 Net Losses
- $12.8 billion (includes $16.5 billion impairment charge)
- SpaceX Valuation
- Around $400 billion (based on summer insider share sale)
Quotes
Charlie Ergen
Co-founder and CEO of EchoStar
“They’ve really been the best vendor we’ve worked with in space. They solve very complex problems for us, move very quickly. They don’t brag about themselves. They’re pretty understated. But they’re doing incredible things with space, whether it be launching or satellites or services.”
deadline.com
“It’s pretty obvious that SpaceX is going to be the leader for the foreseeable future. Their lead is actually growing. Their biggest competitor is China.”
deadline.com
