SpaceX and telecommunications company EchoStar have agreed to a deal worth around $17B for Elon Musk’s company to buy wireless spectrum licenses from the latter. The deal reported Monday morning sent Echo Star’s SATS stock surging in value, peaking at a nearly 20% hike, including a 19% pre-trading climb entering the morning.
Both companies also announced a deal that will enable EchoStar’s Boost Mobile subscribers to access Starlink’s direct-to-cell service to extend satellite service to areas without service. Gwynne Shotwell, president and COO of SpaceX, said the deal will help the company “end mobile dead zones around the world… With exclusive spectrum, SpaceX will develop next-generation Starlink Direct to Cell satellites, which will have a step change in performance and enable us to enhance coverage for customers wherever they are in the world.”
Year-to-date, SATS shares are up over 250%, picking up this year amid the stock market’s resurgence. Despite the deal ringing well for SATS, SpaceX’s side of the purchase sent TSLA shares down, which often happens when investors and fans of Musk are against a decision that one of his publicly traded companies makes. Meanwhile, Musk-favored Dogecoin is up over 14% in the past week, riding a sudden rally in value after a bearish August.
Also Read: Is Musk Quietly Rebuilding Dogecoin? $200M DOGE Treasury Says Maybe
Furthermore, SpaceX says it will pay up to $8.5 billion in cash and issue up to $8.5 billion in stock. SpaceX has also agreed to cover roughly $2 billion in interest payments on EchoStar’s debt obligations through late 2027.