Elon Musk's SpaceX To Buy More EchoStar Spectrum Licenses For $2.6 Billion

Telecommunications firm EchoStar Corp. (NASDAQ:SATS) said on Thursday, it will sell more wireless spectrum licenses to SpaceX for about $2.6 billion in exchange for stock in the Elon Musk-backed company that owns the Starlink satellite internet network.

The announcement is an extension to the $17 billion deal the companies struck in September, which will close after receiving regulatory approval. The AWS-3 licenses cover airwaves across the U.S. that can be used to support mobile and satellite communications.

EchoStar has been selling off spectrum after a U.S. government investigation into whether it was hoarding licenses that are supposed to be in public use. The company agreed to sell some spectrum to AT&T Inc. (NYSE:T) in August for $23 billion, and then struck a deal with SpaceX for spectrum licenses meant for satellite and mobile communications.

The Federal Communications Commission terminated its investigation into EchoStar’s use of spectrum after those sales.

See also: Here’s How Much You Would Have Made Owning EchoStar Stock In The Last 5 Years

What’s Going On With EchoStar’s Shares Thursday?

The fresh deal with SpaceX was announced alongside EchoStar’s third-quarter results. The company reported revenues of $3.61 billion, missing analysts’ estimates of $3.75 billion. Loss per share was reported at $44.37 as the company recorded a one-time, non-cash loss of $16.48 billion, as the company began dismantling unused portions of its 5G network.

At last check, Nasdaq-listed EchoStar’s shares were up 1.3% to $73.25 in trading before the bell, after having fallen about 4% in the last session. So far this year, shares have more than tripled in value.

According to Benzinga’s Edge Rankings, the stock shows strong momentum with bullish medium- and long-term trends, but weak growth and value scores suggest limited fundamentals support the rally.

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