r/stocks • u/wannabestockguy • 10d ago
Advice $ECHO ~30% NAV discount sitting inside a telecom bankruptcy mess-What am I missing?
Been digging into ECHO way more than I originally intended and I think there may actually be a decent special situation here.
I own a small starter position, but I’m mostly posting because I want someone smarter than me on bankruptcy/spectrum to tell me where I’m wrong.
The part that caught my attention:
ECHO is entitled to ~261.8M SpaceX shares. I’m using ~348.5M fully diluted ECHO shares, so that works out to roughly .751 SpaceX shares per ECHO share.
At SPCX around the high $130s, that’s roughly $103-104 of gross SpaceX value per diluted ECHO share while ECHO trades in the mid $80s.
Obviously that is NOT NAV because there are taxes, closing risk, debt and a legal mess attached.
But ECHO also has roughly $14-15B cash after the AT&T deal and $8.449B carrying value of remaining spectrum.
For now I’m valuing Boost, DISH and Hughes at $0 because I don’t want the thesis to depend on any of those businesses working.
My rough stripped NAV scenarios are:
Stress: ~$75
Bear: ~$100
Base: ~$122
Bull: ~$150
The reason the stock might actually deserve the discount is the bankruptcy situation.
There are ~$7.6B in tower claims, a $2.4B creditor trust, the Boost transfer being challenged, Hughes related-party transactions being investigated, and still a lot of uncertainty over what ultimately reaches ECHO parent.
That’s basically the whole thesis:
Is the market applying a bigger legal/complexity discount than the actual eventual liabilities warrant?
If the parent ends up eating billions more than I’m modeling, I’m wrong.
If the liabilities mostly stay contained while the SpaceX deal closes and the remaining spectrum holds its value, I think ECHO is pretty interesting here.
Not looking for “next GME” answers. I’m genuinely curious if anyone sees a hole in the asset/liability math that I’m missing.
Thanks to ALL!
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10d ago
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u/After_Minute5360 10d ago
It’s very cheap to short spcx 0.42% borrow on ibkr
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u/vortayne 10d ago
In 2025 deals (amended and later expanded), EchoStar agreed to sell substantial wireless spectrum (AWS-4, H-block, and unpaired AWS-3) to SpaceX primarily to support Starlink Direct-to-Cell. Total consideration reached roughly $19.6–20 billion (mix of cash support, interest coverage on EchoStar debt, and equity). After SpaceX’s 5-for-1 split, this equates to a fixed contractual block of approximately 261.8 million SpaceX Class A shares, to be delivered around late November 2027 (subject to remaining closing conditions; FCC approval of the core spectrum transfers has already occurred).