Why EchoStar Shares Are Soaring Today

Key Points

• EchoStar has agreed to sell spectrum licenses to AT&T for about $23 billion.

• The deal provides a massive cash infusion to EchoStar, and should help it to resolve its issues with telecom regulators.

• EchoStar still has a lot of work to do to be a success, but the company is on firmer footing now.

• 10 stocks we like better than EchoStar ›

EchoStar (NASDAQ: SATS) has a deal to sell wireless spectrum licenses to AT&T (NYSE: T) for $23 billion, a deal that would clear up a lot of the uncertainty surrounding the telecommunications company. Investors are celebrating the announcement, sending EchoStar shares up more than 75% as of 10 a.m. ET.

Image source: Getty Images.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

Switching focus as pressure builds

EchoStar is a satellite television and communications company currently focused on growing its Boost Mobile cellular business, the nation's fourth-largest wireless carrier.

The company has been the target of a Federal Communications Commission (FCC) investigation over whether it was using its spectrum, leading to some fears EchoStar could seek bankruptcy protection to avoid having the licenses repossessed.

On Tuesday, EchoStar said it would sell its 3.45 GHz and 600 MHz spectrum licenses to AT&T, a move the company said is "part of EchoStar's ongoing efforts to resolve the FCC's inquiries." EchoStar will now focus on operating Boost as a "hybrid mobile network operator," meaning it will use leased spectrum from AT&T and others in addition to building out its own towers.

"This transaction puts our business on a solid financial path, further facilitating EchoStar's long-term success, and enhancing our ability to innovate and compete as a hybrid network operator," CEO Hamid Akhavan said in a statement. "The proceeds of this transaction will be used for, among other things, retiring certain debt obligations and funding EchoStar's continued operations and growth initiatives."

AT&T will use the spectrum to continue to build out its 5G network.

Is EchoStar stock a buy?

The massive move in the stock price is impressive, but it is more a reflection on how worried investors were prior to this announcement than a sign that the stock is destined for success from here.

EchoStar is clear of near-term danger, and the cash infusion should help the company pay down its debt and eliminate the near-term bankruptcy fears. But the company is a bit player in a massive industry and has a lot of work to do to build out Boost and its satellite businesses.

Therefore, there's less risk here than there was a week ago, but EchoStar is still best suited as a small part of a well-diversified portfolio.

Should you invest $1,000 in EchoStar right now?

Before you buy stock in EchoStar, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and EchoStar wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $656,895!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,102,148!*

Now, it’s worth noting Stock Advisor’s total average return is 1,062% — a market-crushing outperformance compared to 184% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of August 25, 2025

Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.