Can you speak more to the structure of the SATS deal with SpaceX? I understand that the actual closing of the sale and transfer of the majority of the SpaceX shares to SATS won't happen until November 2027. I assume SATS can't actually recognize the shares on its book until that happens. How are you discounting that, if at all?
(i) December 2026 which relates to the trust transfer of the spectrum. This is the key one and and will be completed once regulatory approvals are met (no reason for FCC to block given SpaceX currently holds no spectrum)
(ii) November 2027: actual closing. This is purely a function of the make-whole date on the existing bonds which falls away at that date.
In theory if FCC clearance is not received by Dec 26 SpaceX has walk away rights but hard to see anything happen there given how critical this spectrum is to SpaceX
In an ideal world step (i) would have been completed ahead of IPO but in terms of probabilities/risk I would put the chances of the deal falling through very low (<5% if that).
So do you see the premium/ Nav you calculated not being realized until actual closing in 2027, or will it be priced in line with the actual IPO? Appears market is pricing more than 5% it not occuring?
I would expect the gap to close in the run-up to the IPO and would look to trim exposure there and then
The other milestone for selling would be FCC clearance this year (more so than the 2027 date which is purely financial engineering to avoid paying an early make whole to existing bondholders)
I am wary of holding on to a proxy once the underlying is readily available but it all depends on how fully priced we are at that point
Thanks for sharing. I noticed not alot of chat about it on socials, twitter, stocktwits etc. Seems surprising, ChatGPT even suggests echostar for space x exposure. Do you think its a matter of the week or days before the IPO someone from cnbc bringing it up which drives demand and attention?
Seperately, I saw on your twitter account you like complex sits... Have you looked at Fannie and Freddie? Curious your thoughts. Thanks.
Its interesting because Bloomberg wrote a whole article about ways to access Space X pre-IPO, layered SPVs etc but didn't once mention EchoStar.
I think part of it is that the EchoStar story is still transitioning from sector specific analysts / distressed stakeholder group and so while there may be some niche attention on socials I don't think its really been a factor institutionally / mainstream yet which I'd expect to ramp up
Can you speak more to the structure of the SATS deal with SpaceX? I understand that the actual closing of the sale and transfer of the majority of the SpaceX shares to SATS won't happen until November 2027. I assume SATS can't actually recognize the shares on its book until that happens. How are you discounting that, if at all?
There are two milestones:
(i) December 2026 which relates to the trust transfer of the spectrum. This is the key one and and will be completed once regulatory approvals are met (no reason for FCC to block given SpaceX currently holds no spectrum)
(ii) November 2027: actual closing. This is purely a function of the make-whole date on the existing bonds which falls away at that date.
In theory if FCC clearance is not received by Dec 26 SpaceX has walk away rights but hard to see anything happen there given how critical this spectrum is to SpaceX
In an ideal world step (i) would have been completed ahead of IPO but in terms of probabilities/risk I would put the chances of the deal falling through very low (<5% if that).
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So do you see the premium/ Nav you calculated not being realized until actual closing in 2027, or will it be priced in line with the actual IPO? Appears market is pricing more than 5% it not occuring?
I would expect the gap to close in the run-up to the IPO and would look to trim exposure there and then
The other milestone for selling would be FCC clearance this year (more so than the 2027 date which is purely financial engineering to avoid paying an early make whole to existing bondholders)
I am wary of holding on to a proxy once the underlying is readily available but it all depends on how fully priced we are at that point
Thanks for sharing. I noticed not alot of chat about it on socials, twitter, stocktwits etc. Seems surprising, ChatGPT even suggests echostar for space x exposure. Do you think its a matter of the week or days before the IPO someone from cnbc bringing it up which drives demand and attention?
Seperately, I saw on your twitter account you like complex sits... Have you looked at Fannie and Freddie? Curious your thoughts. Thanks.
Its interesting because Bloomberg wrote a whole article about ways to access Space X pre-IPO, layered SPVs etc but didn't once mention EchoStar.
I think part of it is that the EchoStar story is still transitioning from sector specific analysts / distressed stakeholder group and so while there may be some niche attention on socials I don't think its really been a factor institutionally / mainstream yet which I'd expect to ramp up
On Fannie Freddie - looked at this a long time ago, would need to refresh so no real views atm