Why EchoStar Stock Jumped Nearly 9% After-Hours Today

EchoStar shares rose nearly 9% in Monday’s extended session as traders reacted to a report of the potential sale of wireless spectrum to telecom giant Verizon Communications, Inc. (VZ).

After settling Monday’s regular session up 0.27% at $73.65, EcoStar stock climbed 8.49% after-hours, while Verizon’s stock edged up merely 0.09% in the extended session.

A Bloomberg report, citing people familiar with the matter, stated that Verizon was in talks with EchoStar, a satellite TV and wireless services provider, to purchase its AWS-3 licenses, which are crucial for carrying 5G wireless signals. 

EchoStar had already sold some of the airwaves to Verizon’s peer AT&T (T) and Elon Musk’s SpaceX, in a bid to resolve a Federal Communications Commission (FCC) probe over whether it has met its 5G buildout obligations and spectrum use.

Citing regulatory filings by EchoStar, the report said the AWS-3 spectrum has a carrying amount of $9.8 billion. The company has sold wireless spectrum to AT&T and SpaceX at prices well over the carrying value, it added. While AT&T paid $23 billion in cash for EchoStar’s low- and mid-band spectrum licenses, SpaceX expended $17 billion.

EchoStar, which acquired a significant chunk of wireless spectrum with the intention of becoming a fourth major carrier in the U.S., has now toned down its ambitions. It was now looking to offer its Boost mobile phone service using a hybrid model, which would partly utilize AT&T’s network.

On Stocktwits, retail sentiment toward EchoStar stock remained ‘neutral’ (53/100) as of late Monday, and the message volume, though ticking up slightly, lingered at ‘low’ levels. Meanwhile, Verizon stock elicited ‘bearish’ sentiment (34/100) from among users of the platform, and the message volume on the stream was ‘normal.’

EchoStar’s stock has soared over 220% for the year-to-date period, while Verizon is up a more modest 14%.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

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