Why EchoStar Stock Zoomed 3% Higher Today
Key Points
And not just any peer company, but the current titan of the commercial space industry.
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Although EchoStar (NASDAQ: SATS) wasn't exactly a stock market star on Wednesday, it did quite well on the market. Investors bid it up by 3% that day, thanks to news from a company the satellite specialist has had plenty of dealings with over the years.
Taking off like a...
That company has significant star power all on its own. It's the Elon Musk-led SpaceX, which has been closely scrutinized lately as it's expected to launch an initial public offering (IPO) very soon.
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Sure enough, Wednesday morning, Bloomberg published an article stating that SpaceX had filed confidentially with the Securities and Exchange Commission (SEC) for an IPO. Citing unidentified "people familiar with the matter," the financial news agency added that this makes it likely the IPO will occur in June.
Musk and his team often like to conduct business in spectacular fashion. So it's entirely in character that this IPO will be, if not ultimately the largest in history, one that really tips the scales. According to Bloomberg's sources, SpaceX's valuation could top $1.75 trillion.
SpaceX has not officially commented on the report, nor has the SEC.
The power of partnership
EchoStar and SpaceX made headlines last year when the satellite specialist sold its wireless spectrum assets to the space company. Outside of that, the two are regular business partners, with SpaceX hauling EchoStar's satellites into the void.
So any IPO that injects a planetary amount of cash into SpaceX is sure to benefit that company's business partners, and EchoStar is among the most important of those entities. Investors are right to be excited about the continued, rocket-like rise of the space giant.
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Eric Volkman 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.
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