EchoStar soars 50% after report Trump urged EchoStar, FCC chair to reach deal on licenses
FILE PHOTO: A satellite model is placed on EchoStar Satellite Services logo in this picture illustration taken April 4, 2022. REUTERS/Dado Ruvic/Illustration/File photo
NEW YORK (Reuters) -Shares of EchoStar rose as much as 50% on Monday following a late Friday Bloomberg report that U.S. President Donald Trump urged EchoStar Chairman Charlie Ergen and Federal Communications Commission Chair Brendan Carr to reach a deal over the fate of the company's wireless spectrum licenses.
The telecommunications services company's stock also surged after the bell on Friday due to the report, which said Trump met on Thursday with Ergen and he telephoned Carr, who came to the White House to join the meeting. EchoStar did not immediately respond to a request for comment.
The FCC told EchoStar in May it was investigating the company's compliance obligations to provide 5G service in the U.S.
EchoStar has been trying to protect its wireless spectrum licenses from the threat of revocation by the FCC.
EchoStar has disclosed that it missed roughly $500 million in interest payments and cited uncertainty around the FCC review.
UBS analysts in a Sunday note said they believe the recent developments "suggest the forfeiting of Echostar's airwaves is less likely and brings spectrum valuation back into focus."
They noted they expect interest from wireless carriers in EchoStar's spectrum licenses "given the shortage of near-term spectrum opportunities and the compatibility of Echostar's airwaves with existing network equipment/deployments," such as those with T-Mobile US and AT&T.
Still, the analysts wrote that with the current situation unresolved, their "neutral" rating on the stock remains.
The stock hit an intraday high of $25.29 on Monday after closing on Friday at $16.84.
Through Friday's close, EchoStar's stock had shed about 30% of value since the FCC notified the company of its probe.
(Reporting by Caroline Valetkevitch and Lance TupperEditing by Rod Nickel)
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