Fresh Capital Reduces Bankruptcy Risk but EchoStar Still Faces a Highly Uncertain Future

EchoStar has broken from its television legacy, agreeing to sell its satellite and online television operations to rival DirecTV. The move isn't surprising considering that EchoStar's predecessor, Dish Network, has made a massive bet on wireless spectrum, spending about $30 billion (more than $100 per EchoStar share) to acquire various spectrum licenses over the past 15 years. Selling the television business, which should close in late 2025, helped EchoStar raise additional capital, which it will plow into the wireless business. The firm will need to invest heavily in additional network coverage, customer acquisition, and developing new enterprise service offerings to build a niche in the wireless market. We expect EchoStar will again need to raise capital two or three years from now, even if the business performs well. Uncertainty remains very high.