Episode Details

EchoStar Corporation (ECHO) Q2 2026 — Reported August 3 (Q2 2026, the three months ended June 30, 2026). Total revenue $3.576B, DOWN 4.0% from $3.725B. Diluted EPS $24.12 and net income to EchoStar of $8.462B — but $9.729B of the $9.790B of pre-tax income is a NON-CASH deconsolidation gain booked when DISH DBS and DISH Wireless filed prepackaged Chapter 11 on June 30. Strip it out and pre-tax income was $61M. On August 2, a THIRD subsidiary — Hughes Satellite Systems — filed its own Chapter 11 in Houston. The stock closed at $85.04, UP 1.1% from an $84.09 close, having traded $83.04 to $88.32. Ticker changed from SATS to ECHO on May 26. The subtraction nobody ran on air: pre-tax income was $9,790.114M and the deconsolidation gain was $9,728,958 thousand — so the entire operating business, four segments and roughly 14 million subscribers, earned $61M pre-tax on $3.576B of revenue, a 1.7% margin. And that $61M still contains a full quarter of DISH Pay-TV, which produced $600.7M of adjusted OIBDA and left the company on June 30. First-half free cash flow was $2.590M. THE CALL: HOLD (3/5, A GREAT TRADE, ALREADY IN THE PRICE.) — base-case value ~$82.0 vs ~$85.04 today. KEY METRICS: - CALL: HOLD 3/5 — fair value ~$82 vs $85.04 (about 4% BELOW). A SUM-OF-THE-PARTS, not a DCF, because Q2 GAAP earnings are a $9.729B non-cash accounting entry, first-half free cash flow was $2.590M, and two of the four segments are now in bankruptcy court. THE BUILD, on 348.5M fully diluted shares (290,451,972 outstanding at 6/30/26 plus ~58M from the 3 7/8% converts): cash after the AT&T close $12.01B + SpaceX stock $11.10B (261.8M shares at the fixed $42.40) + remaining spectrum at carrying value $8.45B + Boost Mobile ~$1.02B (5x annualised adjusted OIBDA of ~$203M) + other investments $0.21B, LESS residual debt and leases $0.21B, deferred tax liabilities $3.41B and an estimated $0.60B of holdco burn to the SpaceX close = $28.6B, or ~$82/share. Range $60–$104 across the two marks we cannot verify. - THE EARNINGS ARE AN ACCOUNTING ENTRY: pre-tax income $9,790.114M less the $9,728.958M deconsolidation gain = $61.156M — a 1.7% pre-tax margin on $3,576.164M of revenue. Note 3 explains it: on June 30 DISH DBS Corporation and DISH Wireless L.L.C. and their subsidiaries filed prepackaged Chapter 11 petitions in the Southern District of Texas, the Bankruptcy Court assumed control, and under ASC 810 EchoStar deconsolidated them. Those entities carried $11,427.038M of NET LIABILITIES; EchoStar's retained equity in them was marked at $0 because their liabilities exceeded their assets. The gain splits $5,209.671M (DISH DBS) and $6,217.367M (DISH Wireless) less a $1,513.571M deferred tax adjustment, $133.196M of credit-loss allowance and $51.313M of parent guarantees. The 10-Q states it is non-cash AND not currently taxable. - WHAT ACTUALLY CONTINUES IS ROUGHLY MINUS $20M A QUARTER: Q2 consolidated adjusted OIBDA was $681.195M (vs $279.647M). Of that, $600.656M is Pay-TV, DECONSOLIDATED June 30. $100.199M is Broadband & Satellite (Hughes), which filed Chapter 11 on August 2. Wireless/Boost contributed $50.760M (a genuine swing from -$98.909M) and the abandoned 5G 'Other' segment cost $71.129M. Segment revenue: Pay-TV $2,248.5M, Wireless $929.0M, Broadband & Satellite $316.9M, Other $91.5M. Subscribers at 6/30/26: Pay-TV 6.391M (DISH TV 4.684M, SLING 1.707M), down 241k in the quarter, ARPU $112.39; Wireless 7.375M, DOWN 118k net after ADDING 212k a year ago, gross adds -20.5%, ARPU $38.60 (+3.2%), churn 2.88%; Broadband 622k, down 24.1% year over year. - THE SPECTRUM LEDGER: AT&T CLOSED, SPACEX HAS NOT. On July 28, 2026 AT&T paid $20.250B in cash for all the 3.45 GHz and 600 MHz licences plus a 99-year Hawaii lease extension; those licences were carried at $16,822.253M. The FCC mandated $2.4B of it into a Wireless Creditor Trust. SpaceX has agreed to pay approximately $20B for the AWS-4 and H-block licences (50 MHz) plus 15 MHz of AWS-3, with up to $11B paid in 261.