Echostar shares jump 58% on $23 billion AT&T spectrum deal

Echostar Corporation (NASDAQ: SATS) shares surged over 60% in premarket trading on Tuesday, August 26, 2025, driven by a major $23 billion spectrum license acquisition deal with AT&T (NYSE: T). The transaction, one of the largest in recent telecommunications history, involves the transfer of approximately 30 MHz of nationwide 3.45 GHz mid-band spectrum and 20 MHz of 600 MHz low-band spectrum. These licenses cover nearly every U.S. market, providing AT&T with a substantial boost to its 5G network capabilities [4].

The deal extends beyond the spectrum purchase, with AT&T and Echostar agreeing to enhance their existing wholesale network services arrangement. This partnership allows Echostar to operate as a hybrid mobile network operator (MNO) under the Boost Mobile brand, using AT&T as its primary network services partner. The agreement enables Echostar to continue offering wireless services without the need to maintain its own extensive network infrastructure [4]. The deal is subject to regulatory approval and is expected to close in mid-2026.

Echostar’s stock opened at $47.22 in premarket trading, a 58.03% increase from its previous close of $29.88. This dramatic rise signals strong market confidence in the strategic value of the deal. Echostar’s 52-week price range had previously spanned between $14.90 and $34.20, making the current premarket price a new 52-week high [4]. Analysts have set a price target range for Echostar stock from $25.00 to $99.00, with an average of $39.50, suggesting the market may have already priced in much of the anticipated value from the agreement.

From a financial perspective, the $23 billion in proceeds will be used to address Echostar’s existing financial pressures. The company reported a net loss of $315.38 million for the trailing twelve months, with a high debt-to-equity ratio of 152.59% and negative free cash flow of $840.56 million. The infusion of capital is expected to provide immediate liquidity and greater financial flexibility, allowing Echostar to reduce debt and fund its ongoing operations and growth initiatives [4].

The deal also addresses long-standing regulatory concerns regarding underutilized spectrum. By transferring the licenses to AT&T, which has the infrastructure and resources to deploy them effectively, Echostar avoids further scrutiny from the Federal Communications Commission (FCC) while securing a significant financial return [4].

Additionally, the partnership ensures that Echostar’s other core businesses, such as DISH TV, Sling, and Hughes, remain unaffected by the transaction. This allows the company to continue focusing on its non-wireless operations while managing the challenges in its wireless segment [4]. The strategic move also positions Echostar to explore further opportunities involving its remaining spectrum assets, potentially leading to additional value creation.

AT&T has stated it will finance the transaction using a combination of cash reserves and incremental borrowings. The company expects its net debt-to-adjusted EBITDA ratio to temporarily rise to the 3x range before returning to its target 2.5x range within three years. AT&T has reaffirmed its 2025 financial guidance and its capital return plans, including $20 billion in share repurchase capacity over the next three years [4].

The market’s enthusiastic response is reflected in AT&T’s own premarket performance, with shares rising 1.5% as investors expressed confidence in the strategic value of the deal. The transaction underscores AT&T’s ongoing commitment to strengthening its U.S. communications infrastructure and its leadership in the 5G space [7]. For Echostar, the agreement offers a creative and financially beneficial resolution to its long-standing spectrum challenges, potentially setting a precedent for similar transactions in the industry [4].

Source:

[1] title: AT&T to buy some spectrum licenses from EchoStar for $23 ...

url: https://ca.finance.yahoo.com/news/t-buy-spectrum-licenses-echostar-103451139.html

[2] title: EchoStar Stock Soars 53.85% on $23 Billion Spectrum ...

url: https://www.ainvest.com/news/echostar-stock-soars-53-85-23-billion-spectrum-sale-2508/

[3] title: EchoStar $SATS shares are up 68% premarket after AT&T ...

url: https://www.reddit.com/r/XGramatikInsights/comments/1n0j0qw/echostar_sats_shares_are_up_68_premarket_after/

[4] title: EchoStar Stock Soars 53.85% on $23 Billion Spectrum ...

[5] title: EchoStar soars on $23 bln spectrum licenses deal with AT&T

url: https://www.tradingview.com/news/reuters.com,2025:newsml_L6N3UI0FU:0-echostar-soars-on-23-bln-spectrum-licenses-deal-with-at-t/

[6] title: AT&T To Buy Spectrum Licenses From EchoStar For $23 ...

url: https://www.rttnews.com/3569083/at-t-to-buy-spectrum-licenses-from-echostar-for-23-bln-backs-2025-outlook-sats-shares-surge.aspx?type=maa

[7] title: AT&T to buy spectrum licenses from EchoStar

url: https://www.investing.com/news/stock-market-news/att-to-buy-spectrum-licenses-from-echostar-93CH-4210542