EchoStar (SATS) Stock Drops as Dish DBS Bankruptcy Filing Looms

TLDR

• EchoStar is preparing to file its Dish DBS satellite TV unit for chapter 11 bankruptcy, possibly as soon as Tuesday.
• The filing follows a restructuring deal backed by bondholders holding more than 82% of Dish DBS’s roughly $10 billion in debt.
• EchoStar carries about $25 billion in total debt and lost roughly 177,000 pay TV subscribers last quarter.
• Pending spectrum sales to AT&T ($22.65 billion) and SpaceX ($17 billion) haven’t closed yet, delaying debt paydown.
• SATS stock opened Monday at $103.80, with a Hold rating and average price target of $137.71 from analysts.

EchoStar (SATS) stock opened at $103.80 on Monday, down 0.1% on the day. The company is now preparing to put its Dish DBS satellite TV unit into chapter 11 bankruptcy, according to the Wall Street Journal.

EchoStar Corporation, SATS

The filing could land as soon as Tuesday. It targets nearly $10 billion in Dish DBS debt that has weighed on EchoStar for years.

A restructuring agreement reached earlier this year is the backbone of the plan. More than 82% of Dish DBS bondholders have already signed on.

The deal aims to cut debt, settle litigation with bondholders, and give EchoStar more room to make future deals. Dish DBS has hired White & Case for legal work and FTI Consulting for financial advice.

The Numbers Behind the Filing

EchoStar’s pay TV business isn’t getting any healthier. Revenue from that segment fell to $2.26 billion last quarter, down more than $260 million from a year earlier.

Subscribers are leaving too. The company shed around 177,000 net pay TV customers in the same period, leaving it with just over 6.6 million total.

Total company debt sits around $25 billion. That’s a heavy load for a business facing what EchoStar itself called “intense and increasing competition” from video, broadband, and wireless rivals.

This isn’t EchoStar’s first rescue attempt. A planned merger between Dish Network and DIRECTV collapsed in 2024 after bondholders refused to participate in a required debt exchange.

Those bondholders argued the deal would shift billions in assets to other companies controlled by EchoStar founder Charlie Ergen. That fight has clearly shaped how this new restructuring was negotiated.

Spectrum Deals Still Pending

EchoStar has also been dealing with FCC pressure over its 5G buildout obligations. To address that, it lined up spectrum sales to AT&T worth $22.65 billion and to SpaceX worth $17 billion.

Neither deal has closed yet. Proceeds from both are supposed to help knock down EchoStar’s debt pile once they go through.

The delay has already caused problems. EchoStar missed interest payments on several bonds due June 1, blaming the wait on AT&T deal proceeds.

By mid-June, EchoStar said Dish DBS would cover those overdue payments instead. That stopgap kept things moving while the bigger restructuring took shape.

On the earnings side, EchoStar posted a loss of $0.51 per share for its most recent quarter, missing estimates by three cents. Revenue of $3.67 billion came in slightly ahead of the $3.65 billion analysts expected, an improvement from the $0.71 loss per share a year earlier.

Wall Street’s view on SATS stock is mixed but leans cautious. The average rating is Hold, with price targets ranging from Weiss Ratings’ sell call to TD Cowen’s $155 buy target.

CEO Hamid Akhavan sold 52,586 shares on June 5 at an average price of $121.00, a transaction worth just over $6.36 million. The sale was made under a pre-arranged trading plan and reduced his stake by 5.73%, though insiders still own 55.90% of the company.

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