What Happened?
Shares of satellite communications company EchoStar (NASDAQGS:SATS) jumped 3.6% in the afternoon session after its subsidiary, Hughes Network Systems, launched a new portfolio of ruggedized Low Earth Orbit (LEO) terminals designed for mission-critical connectivity.
These transportable terminals were certified for use on Eutelsat's OneWeb LEO network and were designed to provide fast, reliable broadband connectivity where traditional networks fell short. The terminals were built for rapid deployment in challenging environments, making them useful for first responders and government agencies when infrastructure was damaged. The product launch was part of a larger company shift away from consumer satellite broadband and toward enterprise customers, a market where revenue was expected to grow significantly.
After the initial pop the shares cooled down to $107.62, up 3.6% from previous close.
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What Is The Market Telling Us
EchoStar’s shares are extremely volatile and have had 35 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 3 days ago when the stock gained 3.3% on the news that Deutsche Bank raised its price target on the company to $131 from $97, while keeping its buy rating on the stock. This positive assessment from the investment bank suggested confidence in the company's future value. The move came despite some political headwinds from the previous day, when two lawmakers raised concerns about EchoStar's multi-billion dollar deals to sell key wireless spectrum to AT&T and SpaceX. The lawmakers urged the Federal Communications Commission and the Justice Department to closely scrutinize the proposed sales, citing potential impacts on market competition.
EchoStar is up 373% since the beginning of the year, and at $107.62 per share, has set a new 52-week high. Investors who bought $1,000 worth of EchoStar’s shares 5 years ago would now be looking at an investment worth $5,201.
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