It was priced at $135<\/strong> in June, spiked above $225<\/strong>, then settled near $150<\/strong>.\u00a0<\/p>\n The banks that took SpaceX public were barred from publishing research on it until July 7. The moment that ban lifted, six of them initiated coverage, all with buy ratings<\/strong>.<\/p>\n Then, Deutsche Bank<\/strong>\u2019s analyst team said something the others did not: You can buy the same rocket company for roughly 20% less<\/strong> than what the market is charging.<\/p>\n The discounted company is EchoStar <\/strong>(SATS), the satellite and wireless firm<\/strong> behind DISH TV, Sling, and Boost Mobile.\u00a0<\/p>\n Analyst Bryan Kraft resumed coverage on July 7<\/strong> with a buy<\/strong>rating<\/strong> and a $143 target<\/strong>, according to CNBC.<\/p>\n More SpaceX Coverage:<\/strong><\/p>\n The gap opened after the IPO. In the month since SpaceX listed, EchoStar fell 23%<\/strong>, while SpaceX climbed 19%<\/strong>.\u00a0<\/p>\n As a result of this, EchoStar buyers now pay less<\/strong> for those SpaceX shares than SpaceX buyers do. As Kraft put it, SATS investors are “buying SPCX at a 20% discount<\/strong>.”<\/p>\n The note landed the same morning SpaceX joined the Nasdaq-100, which drew billions in passive buying.<\/p>\n Sven Piper / Getty Images<\/p>\n<\/figcaption><\/figure>\n EchoStar did not buy into SpaceX. It sold something SpaceX wanted.\u00a0<\/p>\n SATS agreed to hand over its AWS-4 and H-block spectrum licenses<\/strong>, according to EchoStar\u2019s investor relations page.\u00a0<\/p>\n Payment arrived partly as roughly $11 billion of SpaceX Class A shares<\/strong>, valued then at $212 apiece<\/strong>, Investopedia reported.<\/p>\n The stake’s net asset value works out to $121.46 per EchoStar share<\/strong>, Intellectia reported. EchoStar also closed at $96.28<\/strong> on July 8<\/strong>. That is about 79 cents<\/strong> on the dollar.\u00a0<\/p>\n Apply the same to SpaceX at $148.26<\/strong>, and an EchoStar buyer picks up the rocket company for nearly $118 a share<\/strong>. Deutsche Bank goes further, arguing the rest of EchoStar comes free.<\/p>\n Related: Trump floats intriguing Elon Musk, SpaceX plan<\/strong><\/p>\n Two things complicate that. The $212<\/strong> mark comes before the 5-for-1 split<\/strong> SpaceX ran in May<\/strong>, so it equals about $42<\/strong> in today’s shares.\u00a0<\/p>\n That means the stake has gained value<\/strong> rather than lost it, Yahoo Finance reported.<\/p>\n Nothing is free, either, while a $24.6 billion debt<\/strong> sits on the books. These discounts usually exist for a reason, and EchoStar has more than one.<\/p>\n The discount is not a market error; it is a price tag on real damage.<\/p>\n Three things went wrong in six weeks<\/strong>:<\/p>\n The company also warned in its first-quarter 10-Q<\/strong> that substantial doubt exists about its ability to continue as a going concern until the spectrum sales close.<\/p>\n A discount you cannot access is not a discount.<\/p>\n SpaceX replaced the usual single 180-day lockup<\/strong> with a tiered schedule that frees shares in 7% increments<\/strong> between days 70 and 135<\/strong>, Morningstar explained.<\/p>\n Early backers<\/strong> can also sell up to 20%<\/strong> of their holdings two trading days after the first post-IPO earnings report, Investing.com noted.<\/p>\n Renaissance Capital<\/strong> called it among the most complicated<\/strong> ever written, Fortune reported.\u00a0<\/p>\n EchoStar has not said where its stake sits in that schedule, which is the biggest question here.<\/strong><\/p>\n Three things decide whether the thesis survives contact with reality.<\/p>\n EchoStar is no substitute for owning SpaceX directly. It is a leveraged, restructuring satellite company holding a large stake in a rocket maker, and the discount pays you for that.<\/p>\n Investors comfortable with that balance sheet get cheaper access to a stock Wall Street just blessed six times over.\u00a0<\/p>\n Everyone else should note that even Deutsche Bank’s $143 target<\/strong> sits only 18%<\/strong> above the SpaceX value it says is already on the books.<\/p>\n Related: SpaceX investors may be ignoring troubling trend<\/strong><\/p>\n #Beatendown #stock #lets #buy #SpaceX #market #price<\/p>\n","protected":false},"excerpt":{"rendered":" SpaceX (SPCX) is the most crowded new trade on Wall Street. It was priced at $135 in June, spiked above $225, then settled near $150.\u00a0 The banks that took SpaceX… <\/p>\n","protected":false},"author":1,"featured_media":11448,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[246],"tags":[1440,152,6259,33,100,1843,91],"class_list":["post-11447","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-popular","tag-beatendown","tag-buy","tag-lets","tag-market","tag-price","tag-spacex","tag-stock"],"_links":{"self":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts\/11447","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=11447"}],"version-history":[{"count":0,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts\/11447\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/media\/11448"}],"wp:attachment":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=11447"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=11447"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=11447"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Deutsche Bank calls EchoStar a discounted play on SpaceX stock<\/h2>\n
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![](\"https:\/\/www.thestreet.com\/.image\/NDA6MDAwMDAwMDAzMTA3NDQ5\/spacex_pl_090726.jpg?profile=rss\")
How EchoStar ended up holding $11 billion of SpaceX stock<\/h2>\n
Two terms worth knowing<\/h3>\n
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The discount math on EchoStar stock, step by step<\/h2>\n
Why EchoStar stock trades at a discount in the first place<\/h2>\n
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Lockups, taxes, and the catch nobody mentions<\/h3>\n
What EchoStar investors should watch next<\/h2>\n
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