Why EchoStar Rocketed 56.2% in June

Key Points

• President Trump intervened to try to broker a deal between EchoStar and the FCC.

• The FCC has been threatening to seize EchoStar's spectrum, saying its rollout of wireless services has been too slow.

• EchoStar bought some time from having to declare bankruptcy, but still has finalized a deal yet.

Shares of EchoStar Corporation (NASDAQ: SATS) rocketed 56.2% higher in June, according to data from S&P Global Market Intelligence.

EchoStar has been embroiled in a controversy with the Federal Communications Commission in the new administration, which has led to missed interest payments and the threat of bankruptcy.

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

However, it appears President Trump intervened on EchoStar's behalf in June, extending the deadline for both parties to agree to a deal.

EchoStar's distressed stock explodes

Coming into the month, EchoStar's stock had fallen to distressed levels. That was to be expected; its core satellite TV business is declining, and its efforts to build a 5G mobile network that could rival the other major telecoms was going too slow for the government's liking. That led to a standoff with FCC Chair Brendan Carr, who had threatened to seize EchoStar's spectrum to sell to other companies. Amid the FCC review, EchoStar skipped interest payments on its debt, not knowing whether it would be able to continue building its mobile network.

In mid-June, President Trump intervened, calling for a meeting between EchoStar CEO Charlie Ergen and Carr, and apparently telling the parties to come to some sort of amicable deal.

After the meeting, EchoStar made $500 million in interest payments it owed before the 30-day grace period was up, buying the company more time to make a deal with the FCC. That being said, EchoStar decided to skip its $114 million interest payment due on July 1, starting another 30-day grace period before the company is technically in default.

Image source: Getty Images.

EchoStar avoids bankruptcy, for now

Given its depressed stock price, it's no surprise to see a big gain when bankruptcy was avoided, and with President Trump seemingly having the company's back.

That being said, the company isn't out of the woods. EchoStar still has a massive $26 billion debt load and about $24 billion in net debt, and the success of its potential wireless business is still very much in doubt.

As such, it's probably best for investors to stay on the sidelines, especially since the stock has surged to a much higher valuation.

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 $699,558!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $976,677!*

Now, it’s worth noting Stock Advisor’s total average return is 1,060% — a market-crushing outperformance compared to 180% 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 June 30, 2025

Billy Duberstein and/or his clients have 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.