Don’t miss out on intel you won’t find anywhere else — join the 6,000+ professionals getting The Memo US newsletter in their inboxes every two weeks.

A slate of hedge funds, including Diameter Capital Partners, Monarch Alternative Capital, Apollo and Redwood Capital Management, saw huge gains from positions taken on Charlie Ergen’s Echostar, according to 9fin sources.

Their exposure spanned across the company’s bonds, stock and converts, sources said. One of the funds is said to have generated half a billion dollars of gains in a day with a single trade, one of the sources said.

That marks a sharp reversal from earlier this year, when Echostar skipped interest payments on its $5.5bn in spectrum notes due 2029 and on 2 June on DISH DBS’ $2.75bn of senior secured notes due 2026, $2.5bn of senior secured notes due 2028 and $1.5bn of senior notes due 2029, and was on the verge of a potential bankruptcy.

Those bonds have rallied between 8 and 21 cents on the dollar between then and the news that the FCC intends to drop its investigation into the company, alongside debt across the sprawling capital stack. Its $1.9bn in SSNs due 2030, for example, reached an astonishing high of 266 cents on the dollar, up from 90 cents in early June.

The company’s share price has skyrocketed since the peak of Ergen’s standoff with the FCC this summer. The stock was trading at $79 at market close on 10 September, the day after the FCC said it intended to drop its inquiry into the company’s spectrum usage, versus just $17 on 11 June, around the time 9fin reported the company was preparing to file.

Investors speaking with 9fin said the company’s spectrum valuation is more than sufficient to cover its current debt, even though the two spectrum deals will see valuable licenses transferred to competitors. Sources also said they were confident the two deals — which still need antitrust clearance from the DOJ — would pass regulatory muster.

The spectrum sales and end of the FCC inquiry also open more opportunities for Ergen to reach a settlement with a group of DISH DBS bondholders who have accused the company of stripping spectrum assets out of their reach, said Blair Levin at New Street Research.

A series of bonds issued out of the Hughes Network box, including its 6.625% SUNs, are coming due in June 2026. While those bonds are not officially marked to be redeemed with proceeds from the AT&T and SpaceX sales, one source remarked that Ergen could send over proceeds to address those maturities when the transactions close.

EchoStar, Diameter, Monarch, Apollo, and Redwood did not respond to requests for comment.