Modest Customer Gains Aren't Enough to Drive Value for EchoStar Shareholders

EchoStar has made a massive bet on wireless spectrum, spending about $30 billion (more than $100 per EchoStar share) to acquire various spectrum licenses over the past 15 years. The firm has been investing heavily in network coverage, customer acquisition, and developing new enterprise service offerings to build a niche in the wireless market, but each of these efforts remains in its infancy. As a result, cash flow has been sharply negative, forcing EchoStar to persistently look to raise capital. While we believe the firm has attractive and unique assets, its weak financial position restricts its ability to maneuver and limits its leverage in negotiations with potential partners.