EchoStar Set for Potential Cash Cow Deal with Verizon
"Shares are trading higher by over 7% so far in pre-market trade. Bloomberg reported Verizon is in talks to purchase some of EchoStar's wireless spectrum, suggesting that the company could secure another cash cow deal."
EchoStar is experiencing a strong pre-market rally due to potential talks with Verizon to purchase valuable 5G spectrum licenses. The potential deal builds on past transactions where similar assets were sold above book value, indicating a promising short-term catalyst.
EchoStar Spectrum Sale Catalyst and Long-Awaited Recovery
"Diving a bit deeper on Echo Star, ticker S-A-T-S. Stock right now only up about 1%, had jumped more than 5%... This is a company, guys, that has been trying to work its way out and stave off bankruptcy... trading at about 75 bucks a pop was at 50 back in 2017. Stock year to date up more than 225%."
The discussion on EchoStar (S-A-T-S) focused on its turnaround story. The company, which has been struggling with regulatory and bankruptcy issues, is now reportedly in talks to sell part of its wireless spectrum to Verizon, potentially unlocking billions in value. The rally from a 50-dollar share price in 2017 to around 75 now and a year-to-date gain of over 225% is highlighted as a long-awaited recovery catalyst for shareholder and bondholder returns.
EchoStar Spectrum Sale as a Catalyst
"Let's take a look at some stocks on the move today. ... their shares have been up as much as 8 percent. So sources saying, yes, it's in talks to sell some of their wireless spectrum to Verizon Communications. Echo Star, they've been trying to get out of bankruptcy ... The market's forcing him to sell it."
EchoStar is in discussions to sell additional wireless spectrum to Verizon amid ongoing bankruptcy restructuring and FCC investigations. The move, which has already resulted in an 8% rally, is seen as a forced but potentially catalytic measure to unlock asset value.
EchoStar ($SATS) Trade Call Based on Spectrum Liquidation Catalysts
"My perspective is that the stock is now trading with a fantastic risk-reward profile. Based on back-of-the-envelope math, EchoStar has already unlocked about $23 billion from spectrum sales, with additional spectrum assets potentially returning another $11-$12 billion -- which nets a baseline value around $55 per share at a time when the stock trades around $62-$63. With the crown jewel AWS 4 spectrum estimated to add roughly $26-$27 billion in value, this trade could push the stock close to triple digits within the next two to three months. I want to see it hit around $100 a share just from the realized spectrum value."
The insight recommends taking a position in EchoStar ($SATS) as the current spectrum liquidation process provides a robust floor and a significant upside potential. With recorded spectral transactions already unlocking over $23 billion and additional assets valued at $26-$27 billion, the stock is positioned to move from current levels ($62-$63) toward a target near $100 per share. The near-term catalyst is expected around the upcoming Paris show, making this a high conviction, actionable trade for short-term investors.