Yet Another Value Podcast - Yummy Century Egg's Guowei Zhang on Echostar $SATS

Episode Date: June 24, 2025

In this episode of Yet Another Value Podcast, host Andrew Walker is joined by Guowei from the substack "Yummy Century Stocks" for an extensive discussion on EchoStar (SATS). They dig into the company’s complex structure, diving deep into its failing satellite and pay TV segments, and the potential trapped value in its wireless spectrum assets. The conversation unpacks regulatory drama with the FCC, speculation around a Trump Mobile tie-in, and the looming potential for bankruptcy. With both long and short positions from top investors and a potential valuation ranging from zero to $100+ per share, this is one of the market's most fascinating distressed plays.____________________________________________________[00:00:00] Andrew introduces EchoStar and guest[00:02:54] Overview of EchoStar’s three business units[00:06:54] Wireless network specs and performance issues[00:11:36] Realistic market challenges and consumer view[00:17:08] Valuation estimate for SATS spectrum[00:19:42] Pushback on spectrum market and caps[00:22:58] Changing spectrum demand and infrastructure[00:24:45] Three core SATS spectrum bands[00:25:32] AWS-3 and AWS-4 deep dive[00:29:47] FCC’s current investigation and history[00:34:00] Simington’s resignation and FCC politics[00:35:02] Trump intervenes, Trump Mobile theory[00:39:19] Potential regulatory settlement outcomes[00:41:09] Market comps for spectrum valuation[00:44:39] Unique legal nature of spectrum assets[00:47:51] Why bankruptcy could benefit EchoStar[00:50:44] Impact of bankruptcy on FCC issues[00:53:21] Risks to spectrum ownership in court[00:54:52] Equity protection in bankruptcy scenario[00:57:42] Possible strategic paths and constraints[01:00:42] Equity thesis despite complex unlock path[01:04:12] Convert notes vs equity pre-bankruptcy[01:07:00] Market speculation and timing expectations[01:08:30] Bankruptcy analogs and comparison to GGP[01:09:34] Challenges to network scaling and valueLinks:Yet Another Value Blog: https://www.yetanothervalueblog.com See our legal disclaimer here: https://www.yetanothervalueblog.com/p/legal-and-disclaimer

You're about to listen to the yet another value podcast. Today, I have way from yummy century stocks on, this is my favorite new substack. I'd encourage you to go check it out. He's done such incredible work on the company slash stock we're going to talk about today. That is Echo Star. The ticker is SATS. Listen to the disclaimer at the end because this is a company that found Medicaid and said, hey, we're about to skip our interest payments. We might go into bankruptcy. But it is a fascinating, fascinating situation. Over a decade of interesting legal, political situations. Every player you can imagine is in it. All of my friends who are at hedge funds, credit funds, the stress funds, they're long, they're short, they're all over

the capital structure. It is one of the most interesting socks in the stock bars today. I don't, I feel pretty comfortable saying that. So he has done incredible work on this. I think you're really going to enjoy this conversation. We go through all sorts of different things. It just touches on everything. So we'll get to that. But first, a word from our sponsors. Today's episode is brought to you by FinTool. Fintoul is the AI junior analyst, Taylor's specifically for individual investors. Everyone in finance is racing to figure out how AI can best be integrated into their investment process, and one of the biggest areas that is catching on with institutional investors is

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All right, hello, and welcome to the yet another value podcast. I'm your host, Andrew Walker. With me today, I'm happy to have one for the first time. I'm going to go ahead and say it by far the best substack that I've seen launched so far this year from Yummy Century Stocks. Way, way, how's it going? Good, how are you? Thank you for the kind words.

Look, I told you before, I just discovered your substack like two weeks ago. I read half of one post and I was like, this guy has a serious distress, hedge fund, private equity background. There's absolutely no doubt about it. And your coverage of the situation we're going to talk about today has been fascinating spot on. We'll dive into that in one second. But before we get there, quick disclaimer, remind everyone, nothing on this podcast investing device. Always true. But look, this company literally put out an 8K two weeks ago.

said, hey, we're not paying interest payments on our bond. We've got 30 days or else it's an event of default. If that doesn't scream, do your own research, doing your own work, not investing advice, I don't know what is. See the full disclaimer at the end of the episode. Anyway, the company we want to talk about today is Echo Star. The ticker is S-A-T-S. This is the merger. This is Charlie Ergen's kind of zombie Frankenstein mashup of the old Dish network plus EchoSar. But I'll turn it over to you. What is Echo Star and why are they so interesting? Sure. So I'll start with a general overview of how they look now, and then we can get into how they got to this place and what's going on with the FCC and so on. So Echo Star is a holding company. They have three main businesses. The first is a Hughes, Hughes satellite business. This is a satellite broadband business. That business is being disrupted by Starlink. And as a result, that's a melting ice cube. There's about $1.5 billion of bonds in that business. But for all, for our conversation, that's zero equity value up to the Echo Star, so we can disregard that.

That's another topic. The second business is their pay TV business. This is their DISH TV. That's also a melting ice cube for, you know, a lot of obvious reasons. But that business has about $12 billion of debt. They generate a lot of cash, $2.6 billion of EBITDA. But there's a little bit of equity value. It depends on your views here.

But for our conversation today, we can view that as, zero equity value as well. Two for three, zero, zero. So I got the easy stuff out of the way. Now, the more complicated stuff is the wireless business. The wireless business has been this saga for the last 15 years. Ergen, Charlie Ergen, who's this visionary telecom guy, he started accumulating spectrum, starting in 2008.

He accumulated a very robust portfolio of spectrum, and he, over the last five years, built this network, this very unique, this banking new network. But the problem is that this network is losing a lot of money. It's not gotten the traction in the consumer market, and it hasn't gotten traction on the wholesale and the enterprise market as well. So they're stuck in a very tough spot. They are highly levered. There's about $13 billion of external debt with this wireless business,

but there's a lot of asset that's being made. trapped into this vehicle that's losing a boatload of money. So that's the issue. When analysts look at this business, they say, okay, the spectrum has definite value, but how do we get from the current situation to a point where shareholders can actually see that value, you can see that cash flow. So it comes to two months ago, FCC came in and started investigating their spectrum holdings, and specifically SpaceX came in.

and wanted to use a part of their spectrum for their satellite services. So the Carr, obviously, is a very political person. He's a chairman. Chairman of the FCC, yep. Right. And at the time, Musk and Trump were buddies, or maybe our buddies. I'm not exactly sure. So Carr saw an opportunity to kind of push Echo Star to kind of,

free some of the spectrum that's in the portfolio right now, which makes sense from his perspective. You know, Carr has been a very vocal proponent of freeing up spectrum in serving the public goods. And he has this running feud with Charlie Ergen over the last at least 10 years about Charlie Ergen warehousing spectrum. And there's been multiple points over the last 10 years that he's been vocal about Echo Star.

So he saw an opportunity to free up spectrum to put some pressure on Echo Star. And here we are, you know, two weeks ago, like you said, Bergen came out with an AK saying that we don't have the certainty that we need to run our network anymore. And as a result, we're going to stop our buildout and we're going to stop our coupon payments. And they have 30 days, which is coming up in 10 days, exactly 10 days. They have a 30-day grace period after which the bondholders can accelerate. and that would push the company into bankruptcy. That was a fantastic overview.

I agree with you. Hughes, throw it to the side, Dish, throw it to the side. If you got any equity value from either of those as a shareholder, you'd probably be pretty happy. So let's talk about when you say wireless business, we talk about the wireless business and the spectrum that backs it up. The wireless business, I have followed this company for a long time. I was Long Dish for a while back in 2017, 2018, the height of the spectrum.

You know, again, DISH has had a ton of spectrum, and people were saying, hey, Verizon's going to need to buy these guys, spectrum shortage. Everyone saw what Charlie saw, spectrum value. I remember, he said, I think it goes up, up, up, up. It's the critical thing. Let me ask you this. Since 2000, you know, T-Mobile buys Sprint, they have to divest a lot of assets to DISH, and DISH is supposed to become the fourth wireless player through Boost Mobile as their network. You mentioned Boost is losing a ton of money. You know, over the past five years, as I've talked to hedge fund friends, you'll hear a lot.

you'll hear a lot of different things about buying Echo Star. Some will say, hey, I like it. Everyone likes it for the spectrum, but some will say, hey, they're building a new ground-up network. You know, it's going to be 5G, native. They can support all this. Because they're building a network from the ground up, they don't have to support 3G. You know, they can do everything.

Their spectrum is all going to be dedicated to 5G, all this sort of stuff. They can optimize in a lot of ways. We think this is going to be a killer network. So I just want to ask you, should we be thinking about, positive value from the wireless business, or should we really just be focusing on the spectrum? How do you feel about that? Yeah, well, you don't have a network without a spectrum, so you can assign any value in a liquidation to the spectrum, sorry, to the network. The network itself sounds great on paper, absolutely fantastic on paper. It's 5G, it's cloud

native, and it's open brand. So 5G means they don't have, like you said, 3G and 4G networks to support, So it's cheaper. Cloud native means they put a lot of hardware into the cloud in the form of software. So it's very easy to update. Great for the company that has this network. And then Open RAND is a very interesting architecture where they plug and play different hardwheres and softwares. They don't have to buy an integrated system from Nokia and Erickson.

So that's a very cheap thing to do. if they can get it working. So it's about, you know, the whole network, you know, is 70% cheaper to build than a legacy network, which is, you know, sounds great on paper, right? I mean, everything sounds great on paper. But the issue with this network is that it's new, it's untested. Integration has been a challenge. There's been technical issues with it.

You know, so, and they haven't built it out yet, right? The headline number is that it's 80% coverage in terms of population, but they only have 24,000 towers up right now. You look at the other guys, the carriers, they have anywhere between 60,000 to 70,000 towers. So, you know, we say it's 80% buildout, but to get from here to, you know, a full network, You not only need substantially more towers, you need spectrum. Spectrum, they have a good portfolio of spectrum, but in order for them to run a full network and support, let's say, I don't know,

50 to 100 million subscribers, you need double the spectrum. And where are you going to get that spectrum? How much is that going to cost? So, you know, it's hard for me to think about the value of the network without the spectrum. and it's so new and so unique. It's not like, you know, T-Mobile will buy that spectrum. Sorry, we'll buy the network and kind of plug it into their existing network in an easy way.

So you're kind of left with this. It's a unique asset. I see the benefit of it. But we also have to be realistic that so far has a lot of issue. It's not do tell. And I want to make a very important point, which is 5G cloud native open rents. sounds great, only for the operator, only from Dish's perspective. From the consumer's standpoint, they can't tell the difference, even if you get it working,

right? And we can say that the network was built for wholesale or enterprise customers, but that market is very small. You know, you can build a full network and have this, you know, $60 billion portfolio of spectrum supporting just the enterprise business. for me and we should probably just move on to the spectrum but for me i always like always thought the wireless thing was interesting because like look i'm not seeing t-mobile verizon 18t are perfect but a wireless business is a huge fixed cost business right your marginal cost to add a sub is very

low everyone's already got a cell phone we saw what happened with a fourth place player now sprint had huge issues but sprint was you know they were terrible so i always thought with dishes like hey, cool. You're going to go new build a network. Cables coming to, by the way. Now, they're on an MBNO, and I know there's rumors maybe boost and dish serve the MVNO for cable. But, you know, I've seen what happens to the fourth place player before. And that was the fourth place surer in Sprint that had a base of customers on a base of stores. Like, you build out a new dish fourth network. Cool. You mentioned 50 to 100 million people. Great. We have to go steal 50 to 100 million people from AT&T, like there's huge marketing costs. You start a price war. Like,

you'd kind of destroy the whole industry. Like, none of the industry was that profitable when there were four players. And now there's kind of like five because DISH will be the fourth and the local cable provider will be the fifth everywhere. Like, it sounds nice on paper, but in theory, like you just start a price war and it's really hard for me to see how you overbuild those returns. So I always kind of thought the NPV of the wireless business was negative, though obviously there were huge tales on both sides. So I'll let you comment on that. And then we should probably just talk to spectrum because that's really the main course here. Yeah, yeah. First of all, I don't want to take away anything from Charlie Oregon. He's, you know,

a very, very unique visionary. So I'm not, you know, I don't want to come out, come out sounding negative on what he's doing. I actually respect him a lot. And I don't want to sound bearish on the situation. I'm actually very bullish on the situation. But I'm just, I want to be realistic here. I agree with you. We're just talking wireless, and I do agree with you on Charlie. I mentioned this on the cogent pod, which was the pod, I believe, two ago. But Charlie has taught me a lot for the cogent pod in the future, like, smartest man

of the room, which most people who interact with Charlie will say he's the smartest man in the room in the room, super complicated story and a lot of leverage, like, for dish, for 10 years that has not worked out well. And then I see Cogent, I'm like, check, check, check, check, you know. Yeah, let's talk spectrum. I think the spectrum is the most interesting, but go ahead. Let me come back to you regarding the wireless business. Yeah.

So, you know, the three carriers are running very competitive businesses. They've segmented their customers very, very well. Yes. They take customers away from that business. Charter and Comcast has been successful over the last two years in taking away the business. But that's only because of the bundling, right? You know, Charter is offering this ridiculous package. where it's, you know, 40% for one gig data at home, and then $30 per month for two mobile lines

with the first year free. I mean, you know, how do you compete with that as Boost? You know, I know Boost has a pretty competitive offer as well, but it's not meaningful enough. The difference is not meaningful enough to grab a lot of consumer, you know, market share. I would actually think that the mobile profit pool is very reasonable. I don't think the ROI is all that. Oh, I agree with you. And I think you mentioned the charter line.

I mean, I know when they launched it, there was a lot of questions. Hey, are people going to stay on it? Because I think the guy from Lightshed mentioned it on Sprint's QR or on Dishes Q1 call. Hey, Sprint gave away a lot of free lines 10 years ago and that was a disaster. But Charters, you know, I think. you can see this in a little bit in their stock price too this year. They said, hey, we bring these guys on. We're going to offload a ton. This is going to be great and people are going to stick with this because it's good value. People were skeptical, but you're starting to see that

reflecting the numbers. And Comcast just this year has heavily switched their model to, I think they're kind of emulating charter. And one of the reasons I think cop sold to Charters because charter proved out, hey, we've got a great MB&O. We're going to offload a ton and this free line and then stay on. It really works because guess what? If you pay $70 all in for two, lines plus broadband, that's cheaper than you would pay two lines if you were going to AT&T. So anyway, I do follow the industry very closely and I can rant about it forever. Anything else you want to say on the wireless side? You know, I just think, you know, strategically charter and Comcast will need to own

wireless network. It's a bullcase for, it's a very big bullcase for, and it's hotly debated. I know it's very hotly debated in the cable side too, but that's one of the natural buyers for dish sets, I think. Let's turn it to the spectrum. The spectrum is, as I said, the main course. As you said, the wireless business can't exist without spectrum, so it's hard to disentable to. I think this is so interesting because, look, go look at analyst price targets. The stock is closed in the low to mid-20s. There are analysts with price targets that are approaching $100 per share, and there are analysts with price targets that says, this is going bankrupt, right? And it might go bankrupt,

and it might be worth $100 for share. Like, both could be true. But I'd love to just discuss the spectrum, how you value it, how you think about that, all that. And then we can flow from there and maybe start talking all the different buckets, all the different securities, everything. But let's just start high level with the spectrum that echoesar slash dish owns. Yeah. So the value math is the portfolio of spectrum is worth probably $60 billion. That's my base case number. So there's about $13 billion, like I said, of debt in the wireless business.

let's just round it out and say the equity value is $45 billion that translates into $150 per share stock price. So that's, you know, and you can cut the spectrum value however you want. But whatever number you kind of substitute, whatever reasonable number that you kind of substitute shows a lot of value trapped in this business. Let's that number. And I would encourage people, again, as I said, Yommy Century Eggs is the best substack that I've seen start up. I hope you keep writing forever because I've loved it. You did a March deck, which I'm looking at. And I've seen other math before on the spectrum.

So people can go look at the March deck. It is slide. I'm sorry, I can't see what slide it is. But if they flip there, you have DishSat, Spectrum Holdings, carrying value slash historical cost and market value that comes up with the $60 billion that you mentioned. Let me start with the first pushback that I think a lot of people would have. Look, all this spectrum, it sounds great, right? They've got a lot of spectrum.

You can go do how, as you said, historical cost is about $30 billion here. You can look at what AT&T, T-Mobile, all this sort of stuff paid. You can, the C-band auction is going to be a big one here. You can look at all that. That sounds great. I think what a lot of people would say is the bears would say is two things. Hey, that sounds great, but Dish owns 20% of the spectrum in the nation right now. If Dish went bankrupt and tried to sell this, we've never seen this.

much spectrum come for sale would be point one and then point two would be there is a spectrum cap AT&T Verizon and T-Mobile would they like this spectrum yes they would love it but they're brushing up against the spectrum cap all of them and those are the three most natural buyers in fact we can talk cable in a second but they're they're by far the three most natural buyers they might be the three only buyers and they're all they all are either hard cap limited or they would have to take a piecemeal and guess what if you put this 30 billion up for sale and did was the fourth bidder, so they were the incremental buyer, if they put it up for sale and all the natural buyers are hitting the spectrum cap, all of a sudden, the auction fails, right? Like, is this even worth

anything? So I think I made the bare points clear. I'd love to just talk to you about both those points. Yeah, I understand your points. I think MEAS spectrum is unique. There's only one part of the spectrum. You can't change that. So there's only one party. And they're more than that. than one party on the other side. So regardless of the caps, which can be changed, you know, spectrum is spectrum. I mean, there is a shortage of spectrum, especially in the bands that DISH owns. So I'm actually very bullish on spectrum value, I think. You know, spectrum of value over the last 10, 15 years hasn't gone up as much as you would expect, right?

I mean, even though everyone is talking about spectrum of value going up, but it hasn't gone up as fast as real estate. It hasn't gone up as fast as, you know, the stock market, right? And but going forward, we're seeing just a lot more stuff being connected to the network, driven by AI, robotics, drones, self-driving cars, and just, you know, I feel like spectrum value will actually go up in the future now, knock on wood, you know, who knows when, when that's going to happen or how much that's going to happen, but there's a clear need for the spectrum, and there's only one of these. And I am very confident that when they come to the market with this big portfolio of

spectrum, they can sell it in a piecemeal fashion. Or, like I said, Charter and Tomcast have to get into the wireless business, and there's only one network. There's only one portfolio that they can get into here. This is not, there's nothing else, literally. very, very unique thing to have in the business world, you know. Let me keep one other pushback. We can come to cable on a second because I'm very familiar with them as well.

I think the other pushback would be 10 years ago, everyone thought what you thought, and that's why spectrum values were appreciating so much, right? Like, hey, data demands continue to go up. We need to get more spectrum, and you can go back and look at the broadcaster auction, a bunch of other auctions, spectrum demand continued to go up. About 10 years ago, you started here. particularly Verizon, but I think T-Mobile as well, they said, hey, look, there is an alternative to spectrum, right? Instead of buying more spectrum, we could push fiber deeper into the network, build more towers, right?

So by doing that, we could leverage our fiber better. And I guess if you kept that thought in mind, and then you thought, you know, I think the broadcaster auction, a lot of this lower band spectrum was really valuable for voice because, you know, you would build a tower and five miles away, send the spectrum and you get it. And voices very low data, but you could cover the whole country that way. That's not really what people need anymore, right? What they need is higher frequency that doesn't go as far, but carries more data, which blends well with, hey, let's just build out the network closer to people,

put more towers, densify the networks. So I guess I would just love to, and I'll have a follow-up question where we can specifically break down a few blocks of SAT spectrum. But do you think, when you say, hey, spectrum continues to increase data demand continues to increase. I think the value go up. Is that kind of using the 10 year ago way of thinking and have things kind of changed today? No, I don't think it has changed at all. I think, you know, these networks have to be built using spectrum based on peak demand, right? It's not, you can't look at the average and say, well, you know, we're only using 20% at the

spectrum. That doesn't make any sense. You know, I mean, a fact of the matter is. is now most of the data is offloaded onto the Wi-Fi network into the fixed wireline business, right? I mean, you don't hear about it as much, but Verizon, AT&T, T-Mobile, a lot of their, most of the data goes through the fixed buying business. This is why Charter and Codcast, we're saying our mobile plans are so profitable, right? Even without trying, 80% of your data goes over the fixed network. And if we can, like, build our network to do the offload, we can just say, oh, all the data

demand happens around the, you know, the MSG in New York City. So we'll just build out a lot of Wi-Fi stations there. We'll offload everything and all of a sudden we're offloading 98% and the 2% that we can't offload, that's what we'll pay the MV&O. Yeah, yeah. I don't, I think that's just, you know, I think that's wishful thinking because that's been the case for the last 10 years. But there's still more devices being connected to the network.

And like I said, you know, these, these spectrums are truly unique in the sense that there's only one of them. And there's, you can't create more of it. And the propagation properties in the mid-band part of the spectrum is very unique. And most of those bands are, actually all the bands have been taken for other uses. You know, there's limited, very limited. And you see that with SpaceX trying to, you know, get some spectrum for their satellite services. And there's nowhere to look at. You know, there's, you got, you got Echo Star and you got Global Star. And that's about it. What are you going to do? So you mentioned, and again, I'm looking at your deck, $60 billion of value for the

spectrum, which, if that's true, the stock is a multi-multibacker. But we can break that down into, there's really three bands that kind of really budged the needle here, right? The first band, the most important band by far is the AWS3 and AWS4 band. If I'm looking at your market value, you've got that at $33 billion, so more than half of your market value. If I'm looking at historical costs, it's over $10 billion. so approaching half of the historical cost of the spectrum.

So I'd love to just talk about the properties of AWS 3, AWS 4, how dish came to buy them, why this is such great spectrum? Because again, this is most of the value here. Absolutely. You're absolutely right to focus on how they got a hold of those spectrum. It's very, very important to what's currently going on with the FCC. So let's talk about the easier one, I guess. AWS3.

They bought that pretty cleanly in 2015. They paid about, you know, there's been some back and forth, but I'll just make it easy. They paid about $10 billion for that part of the spectrum. It's in the mid-band part of the spectrum, very useful for 5G. So I would say that's very clean. You know, that's a clean part of the spectrum.

AWS4 has a more complicated background. AWS4 started as satellite, mobile satellite services. These are licenses that were owned by two entities, Terrastar and DBSD in North America. They went bankrupt and DISH bought them in 2012, I want to say. And in 2012, they petitioned the FCC to add a terrestrial, license to this spectrum without paying anything for it. And the FCC did that. So that was a huge windfall, I want to say, for DISH.

And that increased the value of that spectrum dramatically. But there are some problems with that. One is they didn't pay a lot for it. I think they paid $3 billion, close to $3 billion for the two bankrupt entities. they got a, you know, big band of spectrum that's available for mobile use without paying anything in addition to that. So, you know, some people were unhappy about that, right? I mean, if you look at the, if you think about the FCC, their purpose is to serve the public interest. It's not a windfalls for private businesses.

And when they, when they did this addition, there were a lot of. pushback, right? So what they did, what the SEC did was to keep this band satellite-centric. And what I mean by that is it started off as a mobile satellite service license with a terrestrial, like ancillary terrestrial component to it. And DISH changed it into a full-scale, flexible-use, terrestrial mobile license. But in the order, what they did was they said, Okay, if there's any interference, right, between the MSS license and the terrestrial license, the terrestrial license has to make sure that the MSS license is not impacted. So even though the satellite license and the terrestrial license are quote unquote,

co-primary, you know, in practice, it is not, right, you know, because, the terrestrial license has to protect the satellite license. Now, that wasn't a problem because DISH owned both the terrestrial and the satellite licenses. So it hasn't been a problem for a very long time until SpaceX started pushing on this. In 2023, they started, you know, petitioning. They started with applications with the FCC to try to be an additional MSS licensee. And they've tried it in various ways six different times with the FCC. FCC has rejected those applications six times because what they said was there's already a licensee in this band. And unless something changes, we're not going to add another licensee, which, and that's something is interference management, right?

They don't want to obviously add another licensee and interrupt this ban from normal operations, existing businesses, you know, incumbent businesses. So, but, you know, as SpaceX continued to try, and, you know, they were met with some success with the FCC in the last couple months. I want to, we might come back to the spectrum holdings because I do think we should talk, but let's just, you mentioned FCC several times there. Let's talk about what's happening with the FCC. So to my knowledge, the SpaceX, as you said, has been petitioning and saying, hey, we want access to this license. you know, it would be hugely helpful for their, every piece of their business. They want access to their own much. To my knowledge, the FCC, you know, Sats, there are property rights.

Sats is sitting on this license unless Sats does something wrong. They have the license. Now, there were issues with the buildout requirements from the Sprint T-Mobile deal. Sats got an extension from the prior regime, and Brandon Card didn't like that. And I will say, look, one of the things with the FCC is you're not allowed to warehouse. spectrum, as you said. You can't buy all the spectrum in the world and sit on and say, ha, ha, one day a mobile player is going to be desperate. And they're going to, that's not in the public interest. So Brennan Carr has not been happy with them from the beginning, but I do

think he said, hey, not only do it and not like them. I can score political points if I kind of wrap them on the wrist and in some way free up spectrum for President Trump's big buddy, Elon Musk. And it's not lost on me that sat stock was up 20% the day that Elon Musk and Trump had their big fallout and Elon accused Trump of being in the obscene piles and everything. Like, you know, every stock was down except for Sats was up 20% because we were like, hey, maybe Brandon Carr is not going to be so interested in helping SpaceX now. So I would just love to talk quickly about, I summarize briefly some of the FCC, but did I hit on the main points?

Like, what's going on with Sats in the FCC right now? Yeah. So Musk was the major instigator in this whole situation, but he has fallen off. to some extent. I don't think it's only because of Musk and his relationship with Trump that Carr started this process of review. For 10 years, he's been saying Sats is a bad actor in Spectrum.

Yeah. Yes, yes. And he was very unhappy with that extension back in September of 2024. Because that extension kind of smelled fishy, right? I mean, from an outsider's perspective, you know, Equistar came in. And then two days later,

the Wireless Bureau gave the extension two days without any review without any public comments that's kind of that's weird I mean I'll I mean what are you going to do I mean that that doesn't make any sense so I think Carr has every right to go back and review that you know from from Carr's perspective

and it just so happens that it helps Trump that helps him to score political points I mean it kills a lot of birds with with one stone So, but having said that, I think Carr is a, you know, you hear what Carr says about public interest. He's highly, highly focused on it. And I do believe him that he wants, he's been in the FCC for a very, very long time. And so I do trust him that he's, even though he's doing some things that may look political, but the ultimate goal aligns with what he's saying about public.

interest in. So, yeah, quickly, and I was just Googling to make sure I was remembered this correctly. I mean, so you say his goal is the public interest, but Nathan Symington was a, was one of the SEC, it's commissioners, right? Brandon Carr is a commissioner. He's the one of the FCC appointees, whatever. Yeah, yeah. Carr is a chair and Simington was. Perfect. He resigns at the start of this month, and then five days letter publishes an op-ed blasting the FCC and saying they're making a mistake with how they're treating Echo Star. So I just love, like, why don't you lay out, what is the mistake that Sevington's talking about? And like, you said, hey, Carr is not being super political with this, maybe a little bit.

But, you know, he's trying to do what's right for the spectrum. And I don't know if I disagree with that. But, you know, you've got an FCC commissioner resigning and five days later blasting the FCC for this. Like, I've loosely followed the FCC for 10 plus years. And I've never heard of something, you know, a blast five days after resigning. And it's a funny story, I feel like. I mean, first of all, Simmington was supposed to step down at the end of June. So he stepped down three weeks earlier.

That was very abrupt, very unusual. And everyone was guessing, you know, gee, what happened? You know, he didn't need to wait five days and you'll find out. Yeah, exactly. And then he came out with this op-ed basically saying that, The FCC shouldn't move against Ecostar. And, you know, it's not to the public interest because of this network that Equestar has built, this fourth network. If you push EchoStar into bankruptcy, then we lose this fourth network, which is not, which doesn't serve the public interest, which is also, you know, also a fair point, right?

Also a fair point. But, you know, the fact that he resigned so abruptly means there's been some sort of a, uh, may be a main. major disagreement on this, and it means that Carr probably wants to move extremely fast. Let's talk what happens last week. So last week, you and I are recording this on June 19th. Last week, Bloomberg, after hours on last Friday, reports, hey, there's been a meeting. Charlie Ergen tried to sit down with Bernie Carr. I think that went, I can't remember if it didn't happen or if it went poorly. But the next day, Charlie gets a meeting with the president, and the president it ends up calling Brandon Carr in and telling them to squash this beef, right?

Then to make it even crazier, on Monday, the Trump organization announces they're launching a Trump mobile network and a smartphone. So I'm sure that was in the works before this, but, you know, it's not hard to draw the dots and say Trump tells them to squash this beef and maybe Sats is about to be really connected to a Trump mobile launch. But I'd love to, like, how do you read the realm of what's happening? Like, what do you think Trump, when he says squash this, be like, what's the result? How do you read all of that?

Yeah, I mean, it's such a strange turn of events. And, I mean, I was speechless for a long time. So what happened chronologically was that Friday afternoon, there was an article that came out on Bloomberg saying that trademarks were filed by Trump for Trump Mobile. So this happened early afternoon before the market closed and didn't get a lot of attention, I guess. But as soon as I saw that, I mean, gee, you know, why, right? Why did he file this trademark on Thursday? And then as soon as the market closed, news came out on Bloomberg saying that they've met.

And Trump has told Carr and Ergen to, basically hug it out, you know, very, very big coincidence, right? And, you know, you know what they say? There are any conspiracies, but there are no coincidences either. You know, so the timing of that trademark filing, timing of the meeting is highly suspicious. And then they came out with Trump mobile on Monday. And the product, I mean, it's clear that they've been thinking about it and working on it for a while, but that product was pushed out prematurely. I mean, you can tell just by the service that they were offered. Did you see the press release said they offered 27-7 service? 27-7. So three extra hours in the day. I mean, the three guys that came out and

basically launched Trump Mobile, those guys don't have telecom experience. They're partnering with what I would say, a marketing outfit in Florida with an MV&O agreement with T-Mobile, this marketing outfit has like 12 people working for them. Their website were full of mistakes regarding the specs on the phone. I mean, it seems like they didn't know how a phone works. I mean, it's just, you know, there were mistakes everywhere. So I have my suspicions as to why they pushed it out. prematurely because what are your suspicions well i mean my suspicion is that they wanted to push it

out so to create some room between this announcement and the announcement that they will partner up with dish at some point in the future so you know trump is basically saying hey for the good of the american public we don't want a big company going bankrupt which makes sense and so you know fcc work with dish to to fix it and then at some point in the near future there's going to be an an announcement saying that DISH is partnering with Trump Mobile for into some extent, which, you know, I'm not exactly sure how the details will work in that case, but they will announce some sort of partnership. So Trump says hug it out between the FC and what does a hug-it-out look like?

Is it the FCC drops everything? Is it DISH commits to accelerating their build-out requirements? As you said, they're about 80% done. They need to cover 100%. And I think it's 2027 at this point. Do they accelerate that? What does a hug-it-out look like to you? Yeah, assuming that they would come to an agreement,

I think that agreement would look like an accelerated buildout of the existing licenses, and then an accelerated build-out of the satellite service in the 2 gigahertz, the AWS-4 banned. So that's what I would assume that would look like. And I think that, you know, I don't know how Oregon feels about that, but I feel like that could be amenable to Oregon. The one thing I haven't said, which we need to really focus on, is that from Oregon's perspective, you know, running this business is not the best option for him.

Yes. Like we said, they are highly levered. they're burning $600 to $700 million a quarter on their wireless network. They only have $5 billion left in cash, and they are going to run out of cash, zero cash by the third quarter of 2006, which is like five quarters from now, zero cash. Obviously, they can't go down to zero cash, and any sort of strategic deal has to be approved by the FCC, that takes time. That deal has to come together, right?

That takes time. There's literally no time for Equestar to do anything but file. Let's talk to the bankruptcy round in a second. I just want to go back, spectrum. The big cahuna of their spectrum, as we said, is AWS3, AWS4. You've got market value at 33. Just real quickly, where do you get the market value of 33? How are you coming up with that number?

Yeah, two things. One is just through market comps, right? I mean, there's been deals in the midband, and you can look at all these deals that were done. What was the most recent deal in the midband? Midband was the AT&T and Verizon paying $80 billion for spectrum in the C band. Was that the IntelSad spectrum that they bought? Exactly, yes. IntelSat is a, it's a very sore subject over here. Yeah, well, you know, that goes to the, well, we can talk a lot more about sort of what, what is this spectrum asset and what does it actually mean to own spectrum, right? Please, we'd love to. Yeah, absolutely.

That's a very... It delves nicely into a possible filing, right? Yeah, yeah, exactly. So, I mean, the spectrum, the spectrum asset is a very strange asset, right? It's not a hard asset. It's not even property, okay? It's a permit, and it's issued. by the FCC, when they issue the permit, you have to provide services that provides a public interest, the public good. That's what it means.

So the permit is subject to a build-out schedule, right? And the permit is granted to you for you to make money for sure, but it's also highly constrained, highly constrained. So I think, I think, Spectrum is unique, but there's a reason why when people provide spectrum back financing, they provide it at a 35% LTV. It's just a weird asset. And someone, the FCC has almost 100% power over how you use it and how you monetize it.

So with respect to the C-band, IntelSat, that's a very good example. of the value of a spectrum. Intasad had some satellite license, very, very narrow. And when the FCC came out and wanted to open up and repurpose that band, everyone thought, oh my goodness, there's a lot of value here, you know. But the fact of the matter is you have to think, these spectrum is for the public good. Public good.

It's not for you to make a windfall. And the license that Intosite had was very limited. was very limited, right? And on top of that, politically, it's a foreign business. You know, you're not going to hand over a bowl of billions and billions of dollars to a foreign business for a public good that the U.S. citizens own. You know, there's just so much problems with that. And as a result, Intos had filed bankruptcy, and they got a few billion dollars from that,

you know, it's a tip, and they got some fees for clearing that spectrum, and they got some new spectrum. So, you know, FCC tried to make everybody kind of okay, okay with that. But think about it, you know, the value of that spectrum went from very little to 80 billion. 80 billion, and then it came down to a few billion, a few billion dollars. It's still the same spectrum. And what changed was the FCC's treatment of, you know, of that spectrum. and how they decided to monetize that spectrum.

They went through the public route rather than the private route. And if I remember correctly, the AWS3 and AWS4 blocks that they own is very close to the C-Band blocks. So you can almost think of these blocks as in terms of strength of coverage there. Am I remembering that correctly? They're pretty, I mean, it depends on it's far. So AWS 3 and 4, they're in the 1.6 to 2 gighertz. The C-band is in the three-point...

Oh, I thought it was in the mid-tooth or some sense. Okay, so it's a little bit lower down the spectrum line. Yeah, it doesn't matter. I mean, it's propagation properties, almost the same propagation properties. Yeah, so, and I mean, the AWS-3 and AWS-4, if I, also, if I remember, they're pretty clear for, you can use them for anything. So, like, from a commercial standpoint, it's not a windfall if you're selling them to a wireless licensee or, you know, transferring them to a wireless licensee. Like, they're already cleared for this. Yes, yes, yeah.

exactly for this. Aside from the, you know, AWS4 because of the history of how they got that license, there's some sort of little quirks, right? We talked about that. But aside from that, these are licensed for flexible use, terrestrial mobile. So these are clean relatively compared to, you know, another company that's trying to repurpose and get a, you know, get a windfall. So when you've got that $33 billion market value, you're kind of just, taking the C-band, the 80 billion, and saying, I can't even remember what that was on a dollar per pop or whatever, but you're kind of just using that to get to the $33 billion. And also there's, you know, 10 billion of bonds associated with that band.

Yes. That was the, that was underwritten at a 30, you know, around a 35% LTV. Yep. So, you know, it's through market transactions, right, that these, these bands have value. So let's talk about the future. All right. So I think we've talked about so much stuff. And we probably could go three hours in this podcast, but I haven't had lunch yet. So we're not going to go three hours. But let's talk about you. You and I are sitting here June 18. I believe by like July 3rd or so, Dish is either going to have to make their interest payment or not make their interest payment. If they don't make interest payment or not make their interest payment, if they don't make their interest payment, they continue. 29 June. Okay, I was basically on the AK, not the skip date, I guess. By the end of June, they're going to have to make their interest payment. If they make their interest payment, they continue. They limp along. If they don't make their interest payment. we go to bankruptcy, you and I both kind of alluded to, hey, there might be a reason Dish wants to go into bankruptcy. So let's talk about the bankruptcy path, why Dish might be interested

in going to bankruptcy path. And look, if you're, the ticker or stats, people are generally looking at this equity. We can talk, there's different things in the capital structure, everything, but people are generating interest to equity. When you hear bankruptcy, you think, oh my God, it's a disaster. Charlie Ergen owns a lot of stock here, right? He's been putting one of the bulk cases here was for the past couple of years, he's been trying to shift as much of his stock into different grats and everything for his kids, right? People said he's only doing that because he thinks the stock's going to the moon. He owns a lot of stuff.

What's the bankruptcy path? Why would the company be interested in bankruptcy as a way to maximize value for equity holders potentially? Yeah. So, you know, like we said, they're burning cash. They don't have time at all. I mean, I'm saying that they have until the third quarter of 2006, but that's looking at zero cash on the balance sheet. And that can happen to a large business like this.

So, and any kind of transaction, any kind of strategic transaction is going to be pretty tough, right? Because you look at it from Charter's perspective, from other wholesale customers' perspective, they don't want to align with this business that's about to go bankrupt. And there's very few places where Charter Organ can kind of squeeze cash out of. There's some unencumbered spectrum, if they do some restructuring, and, you know, there's a lot of ifs, right, in order for them to squeeze maybe a couple billion out. And that's not enough to run their network. And so from his perspective, you know, with or without FCC's intervention, let's assume that the last two months didn't happen, and they're just operating, you know, as a normal business, the best way to liquidate. is to file because they stop interest payments, most of the interest payments, right?

They have time. They have stayed from the FCC, and they could reduce their cash burn significantly. That would give them time to actually run a process and liquidate. You don't want to be in a situation where you're running out of cash and liquidating at the same time. You know, the market will just wait for you, right? There's no leverage. There's no benefit for you to just say, hey, we're running out of cash. We've got to sell some assets now or else we're going to file.

Well, guess what? You're going to file, right? I mean, these bankruptcy talks are highly detrimental, highly detrimental to this business from a fundamental perspective. And these bankruptcy talks are reflexive, highly reflexive in the market. So when you start talking about bankruptcy, especially for lever business, businesses such as this, that's burning cash. You're pretty much in bankruptcy. Look, you need to raise money. Well, cool. Nobody's going to lend to you unsecured anymore,

right? Like, yeah, you can start to be pulling up the unencumbered assets and borrowing against them because people are going to be. But yeah, it's a disaster. It's reflexive, as you're saying. But do you, so that's one of the reasons, right? You stop the buildout requirements. You pause. You pause, you pause the interest payments. And then you can go to the bankruptcy court and say, hey, you know, it's funny. Most companies, the cash burden increases when they go bankruptcy because you get all these extra costs. These guys, it might actually, because the build-out requirements are paused, it might

actually improve. Yeah. They go bankrupt, right? They run, like, how does that impact the FCC? Does that stay a lot of the FCC issues they're having as well? No, the FCC has a right to do their job. So it wouldn't, you know, the FCC wouldn't be impacted substantially. What it does is bankruptcy gives.

a forum for a lot of these issues to be adjudicated. Yep. I think the history is the adjudication is much more favorable in the bankruptcy court than kind of if you're negotiating with the FCC. Am I thinking about that correctly? Man, you know, I'm looking at these precedent cases and none of these guys came out unscarred with a fight with the FCC, you know.

So the biggest case was Next Wave that happened in late 90s, early 2000s. And that was a very clear, simple, in my mind, a clear simple issue, which was, you know, just for your listeners, Next Wave bought some spectrum, but they didn't have the money. So they were put on an installment plan. They filed a couple years later. The FCC took away the spectrum saying that, hey, you default it on your payment. So we can take that back and sell it to it. the wireless guys for a boatload of money, the court took years to basically say,

hey, the FCC should be acting as a creditor and not as a regulator in that case. And as a result, the FCC did not have the right to take away the spectrum. Their spectrum was returned to Next Wave, but Next Wave came out, even though they won the case nominally in a practical perspective, they missed the hot market to sell their spectrum, you know, and they got very little relative to what they could have sold for in late 90s when the market was hot. I was thinking of it because the, I was thinking particularly that case, because the judge ruled, hey, the FCC and a bankruptcy can't just go revoke the license.

The company can go sell it. I did not realize that they missed the hot market, though, you know, the dynamics of the late 90s spectrum market are probably very unique. in terms of just the internet bubble that was going on. Right. And for the next wave case, we have to be very specific. The court didn't say that the FCC doesn't have a right to do their job. The court said they couldn't take away the spectrum because they were a creditor.

And in bankruptcy, all these things are stayed, right? So in fact, it basically gave the FCC the right to do whatever they want based on their ambiguous statute, even in bankruptcy. right so that's the so that's the decision that we have you i think if i'm reading correctly if i'm hearing if i've seen your decks correctly you kind of think a bankruptcy is the best path forward here right it stays to build out requirements it stays the interest it lets them run a process and everything i think the two things you know i i was pretty close to buying this stock a couple weeks ago i think the two things because i look it takes time to gain these out research and everything the two things that i had in my worry were a they go into the bank

court and the FCC says, hey, we still have the rights to do our jobs, just didn't hit their buildup requirements, all this sort of stuff. So we can take this spectrum back. And a judge says, yeah, you're right. Like, hey, yes, we can't, we have to go by the bankruptcy court, but they missed their billet out requirements. Public goods, you take it. Those number one.

And then number two, which is actually probably will wait on me a little bit more. Charlie Ergen owns a lot of stock here, right? But you throw a bankruptcy apartment. Charlie manages to throw a dip in, throw in some financing, get a new, MIP plan, like you could imagine a way where the equity is getting massively, massively diluted in a way that's very beneficial for Charlie Ergen. So I was kind of worried, like, again, people have gotten in trouble with Sats for 10 years because Charlie Ogan's really smart, you know, every hedgelanderner says, hey, did you know

Charlie Ergan's a really good poker player? And what I'm worried about here is we're playing poker and Charlie Ergan holds all the cards and you think that you've got a pot of gold. And Charlie Ergan says, actually, that pot of gold through the bankruptcy pocket is all my So I'd love to just hear you discuss those two points. Yeah, yeah, there are limits on what he can do, obviously, because he's been talking about the value of this spectrum portfolio for a long time. It's public records.

He can't just go in and say, well, whoops, now the values have. Why is there limits to that? Well, because there's a public record for what he thinks. He said two years ago, I think the spectrum's worth $100 billion he files for bankruptcy. He says, hey, build out requirements, you know, the market change, blah, blah, blah, blah, blah. I'm here, I'm putting my MIP, I'm putting my dip, I'm putting my security. Like, why does the public record, he just says the market changed. I was wrong.

Nobody else is paying more for this than me. Yes. So you're right, Charlie Oregon is driving the bus there. He's a class B shareholder. But there are Class A shareholders. Well, there needs to be equity committees on both Class A and the Class B's. And there's going to be natural attention. Well, unless the Class A is, you know, if they have fresh cash, I'm assuming that most

distress guys are going to be playing in that name and they do have this you know have cash and they know how to play the game it wouldn't be a big deal right they'll just they'll just follow along with the rights offering at a low valuation that's great for everybody right so but you know that kind of defeats a purpose of the rights offering to to some extent if they don't need the cash but but even despite all that you know because there's the public records as to what management thinks the value of the spectrums are you can't just go in and say well things have changed that the value is now down a lot. Well, spectrum is a spectrum, right? It's not like a business. And, you know, the value of the spectrum doesn't go to zero like a business does. And even if at the FCC comes in and kind of

try to take away a portion of their license, it's a small, it's a small portfolio, right? It's a small portion. So there's a limit to, I guess, what Charlie Oregon can do. He can try. He can definitely try. But I don't think you'll be disadvantaged by being in the equity as long as you have fresh cash to do whatever Charlie Oregon is doing at that point in time. And the judge is also not, you know, the judge is going to review it very carefully as well. So what you're saying is in my draconian Charlie takes everything scenario, what you're saying is it's probably done through a rights offering. And if you're an equity holder with friends, cash, you'll get Perry participation in the rights offering, so you'll probably be okay there.

Yeah, yeah. Let's talk, let's just talk, base case, forget my shenanigans, everything, base case. It sounds to me like you think they are going to file. Am I thinking about that correctly? Yeah, yeah. Do you think they file this round, or do you think it takes another six months or something? You know, so I think they're kind of sort of three scenarios. One is filing now.

The other is working with the FCC, resolving their issues and do some partnership with Trump Mobile. I think that's a very risky move. The more I think about it, at first I was pretty happy about that. I think that could solve a lot of EchoStars issues. But now with Trump Mobile being out and what they're doing with it, it's going to be very risky. It's like a poison gift. Well, so I don't suggest Charlie, I would suggest Charlie Oregon be very careful there. And then the third option is some sort of a strategic deal, but the strategic deal has to meet a few

criterias that are very tough to meet. One is it has to stop the bleeding in the operating business, which MV&O agreement with charter or Comcast could do, but then you have to think about, well, how long does it take for their stops to move on to the DISH network? Is there going to be any technical issues, any business issues, because they still need the MVNO agreement with AT&T, right? And on top of that, Charter has to make an equity investment into DISH in order to make sure that they don't go bankrupt.

You mentioned Charter. Charter just bought Cox. Yeah. Comcast slightly different. They're spinning off their cable networks, so I don't think that deal would. But Charter's in the process of buying Cox. that deal happened two, three weeks ago. When you saw that deal, did you think that has any read-through to the

dish deal either positively or negative, a potential dish deal, either positively or negatively? It's negative for sure because it's a distraction for a deal with DISH. But the deal with DISH could look in many different ways, right? So they can make an equity investment. They don't have to own the business. But the problem with an equity investment comes down to what kind of valuation are you going to invest it in, the stock value and the intrinsic value are so far apart.

There's, it's, it's just any, any sort of path for Ergen looks bad. And as a result, that's why I think sort of bankruptcy is the best thing for him. And I don't mean that in a negative way. You know, I think it's the best way to realize value. And unfortunately, the situation is what it is. But he's constrained from a leverage perspective. And as a result, there's no one coming in to save him. You know, there's no, there's no like wholesale customers or enterprise customers coming in.

And all of a sudden, you know, you're golden. And even a charter deal because of the leverage, the difference between intrinsic value and stock value and maybe some technical issues with the network, that's a lot, a lot of issue to work through in the next five quarters. So I don't, I just, I don't know. I did I you're let me ask this and you're positive on the stock right like you I'm looking at your recovery your low case recovery because you think there's a lot of asset value here but then you hear all my like look it's messy the history here's people can burn uh there's the buyers are questionable because either natural buyers are the cap or if charter and comcasts do it it's an

equity investment but there's a lot of questions here so i i guess my question you like why be positive on the stock, given, again, it does seem like there's a lot of asset value here, but when you kind of game it out, it's tough to see how that asset value gets like fully unlocked for just like a lot of different reasons. Yeah, yeah. So, you know, so I've been following this situation for a while. It's always been a dicey situation. Everyone knows there's the intrinsic value there, but the path to realization was very murky.

The reason I got really focused on this prior, like maybe a few months ago, was you can see that they're running out options. You can literally see they've levered up most of their spectrum assets. There's maybe some ways to get cash through junior liens on spectrum assets here and there, but that's not going to be a viable path now with an FCC review. So there's going to be a deal somewhere, right? There's going to be action here. It's not going to be business, you know, as usual here.

And that's why it's interesting. thing for me because there is there's this value is finally going to be unlocked after 15 years of everyone saying that spectrum value this and that um so there has to be a deal here right whether it's a strategic at first i thought it was going to be a strategic with charter and and then when this bankruptcy possibility came up i mean wow that's that's natural right that's that's the easiest path to realize value for equity guys. Now, you know, you know, Ergen has pulled a lot of rabbits out of his hats through the years. So I mean, look for for seven years, people said, hey, all that, so stats for those you don't know, it used to be the legacy Hughes business and it had

a ton of cash. And for seven years, everybody, the bears say, oh, that cash is going to be used to bail out dish. And you'd hear no, no, no, no chance would never be used to bail out dish. And then guess So I merged the two together, and it was used to bail out the last question. And then, again, I'm going to include a link to the yummy century, the yummy century eggs in the show notes. You should go read everything you did because it's been so useful. By the way, you know what a century egg is? Have you had it before? I've looked it up so I knew.

I have not. But I'll try it. The next time I'm down in Chinatown, I'm going to try and have one in your honor. Try it be careful, though, okay? Is it, you say yummy century eggs and then your profile suggests they might not be that yummy. is. We're going to have to have you on back in the near future because I've got a lot of thoughts on local broadcasters I'd like to talk to you about.

I know people wanted to hear thoughts on the serious XM spectrum. Don't have time for this. Last question. Dishes cab structure is complex. Everidge's remember not financial advice, all that sort of stuff, but I'm just going to break it down to one. Do you prefer the convert notes, specifically the AWS3-AWS-4 convert notes, which convert at 33 and have the benefit of having a lien on those AWS 3, AWS 4 notes.

Do you promote those for the downside with a lot of equity upside, or do you just prefer the straight equity? I just, I prefer not doing anything now until they file. Until they file. Yeah, for selling there. And, you know, when they, when they do file, the FCC is going to come out with some tough languages that might scare the market a bit. It's interesting you say that, because I did gain that on.

my head. But then I was also like, look, you and I are not the only ones having these conversations. Every one of my events, distressed friends, has been all over this situation for 18 months minimum. Like this is a very popular one, really complex cap structure. So I was kind of like, is this one of those things where the day they file, the stock actually goes up and set it down because people say, look, we're cutting out six months of cash burn, right? Like we're finally getting to the end game. So the stock goes up because people can start saying the end game is here. As I kind of question, you said, it would be better for them to file today versus file in six months because that six months of cash burn, they don't have to worry about.

So that's kind of why I was gaining it. And to me, those AWS3 convert notes, I don't think they can get primed because they've already got the senior securities above them and they've got the covenant on it. But those AWS3 convert notes look really interesting because they've got the downside protection of having a lot of AWS3 value there. I think that's the prime asset here. And then they've got the upside kicker of they can convert at 33, which is a long way from 25. But if you kind of got the full beautiful value in lock where you're getting $50, $100 in equity

value, you'd be very happy as a convert. So that's the interesting one to me, but I might be just too much of a dumb, no i mean i think i think it makes it makes a lot of sense i think uh that's fine but um you know it's weird right this situation where equity value has um there's a lot more in bankruptcy than outside of bankruptcy so we haven't seen a lot of situations like that so you need to figure out oh i haven't figured out how that convert feature works in in bankruptcy my understanding of it my very limited understanding of it is that the convert feature goes away and you're left with, you're left as a creditor.

Okay. Well, I'm going to have to go do some more digging on the indenture there then, because I had assumed until the pack was struck, until the deal was struck, I'd assumed you would have that option and then people would be like kind of jostling around it, but I'm going to have to go do some work there. Yeah. You know, in most cases, this doesn't matter, right, because the convert feature is worth zero anyway. But in this case, there is value there.

And Judge will take that into account, too, but I think normally what they would say is, okay, you pick, you want to be equity, you want to pick creditor, you're a creditor. But, you know, the optionality, I don't know how that works in bankruptcy specifically. That's really interesting. And I've just, I've done quite a, not that I'm the world's preeminent expert, but I have done a lot of bankruptcy. And as you're saying, I can't remember a time where there was a convert that had potential in the money optionality.

It will be interesting to go. Going up, when they file, that could very well be the case. I mean, most distressed guys are not getting in, right? They're not getting into the bankruptcy. The long only guys are not buying, right? Because there's a bankruptcy coming. Yeah, yeah. So you got to think who's the marginal buyer.

You know, last week, you know, the stock went up four days out of five. And, you know, you're thinking, gee, who's the marginal buyer there? Who's the marginal buyer there? I don't know who the marginal buyer there. But when the news came out about Trump, you know, maybe some people who are close to the administration who actually know what's going on there. But as of now, you know, I think all the distress guys are waiting. And it's a super fascinating situation for every reason we talked about.

And then I liked one thing you said at the end where there aren't a lot of situations where, like, I think this is worth more in bankruptcy than it is as a standalone. And the only thing that I can even think that remotely resembles that remotely, well, A, if you had like a talp litigation or one of those as best, litigation or something, maybe, but those are so far away. And that was like such a, but the only other one is GCP in 2009, right? Where you file so that you're not like, because you can't refi, you file and then you have tons of equity value.

And that basically made Ackman's career in a lot of people's career, right? That's because he bought a cheap. But this case, in this case, I don't know, you know, I don't know if you can actually get it at a low basis. Oh, the other thing that I want to emphasize is, you know, a lot of people there are bullish on EchoStar because they build this great network and they have this vision of this network being, you know, creating a lot of value for the business. I would just say, okay, even if you look at T-Mobile and try to imagine a path to get

to T-Mobile, right, this path is very treacherous. Not only because the customers, you know, assuming you can even get the customers, you need the spectrum, you need to double or even triple your spectrum. You can't get there. And even if there's spectrums available, you're going to pay, I don't know, $100 billion for that. I mean, there's, you know, people trying to play the upside from this business being a going concern, I think, you know, is a very tough path. Look, that's what I was trying to drive with you at the beginning, right? Like, hey, play it out for me.

It's not like there's 100 million people waiting to get cell phone service, right? So you have to go start a price war, do the business. build out. You're going to have to spend, build, think about NFL Sunday. Anybody who watches it, how many ads for AT&T, T Mobile and Verizon, do C? Cool. Sprint's going to, or sorry, Dish is going to have to do those every Sunday as well. You've got to hand-by-hand win people, as you're seeing, as your network fills up, you've got to buy more spectrum. Like, that's a tough, tough path, and I've always been very skeptical of. Now, charter and Comcast, former JV, buy, by Echo Star, and then go that path. It might be a different story, right?

Right? Or EchSR does that with a path to selling. That might be a different story. But wait, this has been awesome. I'm going to do one last pitch for Yami Century Egg. And I'm going to say this has been a ton of fun because alternatively throughout this conversation, I've wanted to YOLO call options and YOLO put options on this. This was great. Straddle.

I say straddle is a good way to play this. It's either going to go up or go down. That's not investing advice for anyone. That's just general advice. But wait, this has been awesome. We're going to, I'm going to be bugging you to get. you back on the near future for broadcasters and some, maybe some serious XM spectrum talk to you. But this has been awesome.

Everyone should subscribe to Yummy Century Scyc and we'll chat soon. Be kind with your editing, please. There's no need for an edit. We're going straight through. This is awesome. You know, it doesn't hurt. This is great. Thanks, man.

Hi, Matt. A quick disclaimer. Nothing on this podcast should be considered an investment advice. Guests or the hosts may have positions in any of the stocks mentioned during this podcast. please do your own work and consult a financial advisor. Thanks.