Why EchoStar Stock Is Skyrocketing Today

EchoStar (NASDAQ: SATS) stock is surging higher in Friday's trading following some big financial news. The company's share price was up 12.8% as of 2 p.m. ET. Meanwhile, the S&P 500 was up 0.3%.

EchoStar submitted a filing with the Securities and Exchange Commission (SEC) indicating that it is making over $500 million in debt-interest payments. The payments had been overdue, but the fact that they are now being dispersed to creditors should help stave off bankruptcy risks.

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EchoStar rockets higher as interest payments defer bankruptcy risk

EchoStar had missed $509 million in combined interest payments due on May 30 and June 2, but it is now sending that cash to creditors. The payments will allow the company to avoid filing for Chapter 11 bankruptcy protection. The satellite technologies specialist would have had to file for Chapter 11 protections if it had not made the payments by June 30. Following today's gains, the stock is now up roughly 26% in 2025 -- and has risen roughly 64% over the last year.

What's next for EchoStar?

EchoStar, which owns Dish Network, had missed interest payments on its debt due to issues with its 5G buildout obligations and spectrum licensing issues raised by the Federal Communications Commission (FCC). The stock rocketed higher earlier this month after it was reported that President Donald Trump was advocating for the FCC to reach a deal with EchoStar that would resolve issues and help the company retain its spectrum licensing rights.

With debt of roughly $26 billion against a market capitalization of roughly $8.2 billion, shareholders of EchoStar's common stock would likely get wiped out if the company were to go through bankruptcy proceedings. The company's financial position doesn't necessarily suggest an imminent risk of bankruptcy, but there is a risk that the satellite communications specialist would file for bankruptcy to shield its spectrum rights from being seized by regulators. Given the payments being made on interest and the advocacy from the Trump administration, it's looking less likely the company will need to go that route.

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Keith Noonan 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.