Key Points
- President Trump held a White House meeting with EchoStar’s Chairman and the FCC chairman to push for a deal over the company’s wireless licenses.
- News of the meeting sent EchoStar’s stock price soaring by 52% in after-hours trading.
- EchoStar faces the threat of losing its valuable licenses as the FCC investigates whether the company is complying with its duties to build out its 5G network.
- The company is under severe financial pressure, having recently missed a $500 million interest payment, which it attributes to the uncertainty surrounding the FCC review.
President Donald Trump personally stepped into a high-stakes battle between EchoStar Corp. and federal regulators, sending the company’s stock on a wild ride. Bloomberg reported that Trump pushed EchoStar Chairman Charlie Ergen and FCC Chair Brendan Carr to find a solution for the company’s troubled wireless spectrum licenses during a White House meeting. The news alone caused EchoStar’s shares to jump by an incredible 52% in after-hours trading on Friday.
The meeting reportedly took place on Thursday. Trump first met with Ergen, then phoned Carr and asked him to come to the White House to join the discussion.
For months, EchoStar has been fighting to keep its valuable wireless spectrum licenses. The Federal Communications Commission (FCC) is threatening to revoke its licenses because it’s investigating whether the company is meeting its legal obligations to build out a 5G network for the American public. In May, the FCC officially questioned EchoStar’s progress and its requests for extensions.
The pressure from regulators has put EchoStar in a tough financial spot. The company claims the FCC’s investigation is directly harming its ability to operate and build its network. It also argues that taking away licenses it paid billions for goes against how the commission has always operated.
The uncertainty has been so damaging that EchoStar recently admitted to missing approximately $500 million in interest payments.
This regulatory cloud also contributed to the collapse of a deal last year in which DirecTV would have acquired EchoStar’s satellite TV business, which includes Dish Network.
For now, the major players are staying quiet. The White House and EchoStar both declined to comment on the meeting, and the FCC has not yet issued a statement.
