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When the FCC told Charlie Ergen it would be launching an investigation into EchoStar’s compliance with its spectrum licenses, many investors began shedding their exposure to the telecom empire that, in many ways, had already put them through the wringer. The outlook only got worse this summer when the company not only skipped interest payments on its bonds, but started preparing to file for bankruptcy.

But where some investors saw uncertainty and volatility, Silver Point Capital, famous for its distressed debt wagers in high profile situations, saw opportunity.

The Greenwich, Connecticut-based hedge fund — already having positioned itself solidly across the conglomerate’s sprawling capital structure — wanted more. The same quarter that tensions with the FCC started to mount, Silver Point racked up holdings in the company’s equity and convertible bonds, according to regulatory disclosures.
In Q2 25, it held roughly 6 million shares, almost six times the amount it held in the quarter before that. And it nearly doubled its holdings in the company’s 3.875% convertible senior spectrum secured notes due 2030.

The thesis? The pressure from FCC chairman Brendan Carr, combined with an administration viewed as more amenable to telecoms dealmaking, would provoke Ergen into selling valuable spectrum assets, according to a source familiar with the firm’s thinking.

A couple months and several meetings with the Trump administration later, that thesis became reality. On 26 August, the company announced a $23bn sale of its 3.45 GHz and 600 MHz spectrum licenses to AT&T, followed a week later with an announced $17bn sale of all its AWS-4 and H-block spectrum to SpaceX. The same day, and without much adieu, Brendan Carr wrote Ergen a letter indicating he would instruct the FCC to end its probe into EchoStar’s spectrum usage.

EchoStar’s share price skyrocketed. Having traded as low as $16 per share at the height of the tensions with the FCC, shares are now hovering around $70, and at one point hit a high of $83. That’s a 134% gain from the day before the AT&T deal was announced, when the stock traded at just $29 a share. Debt across the company’s capital stack also jumped meaningfully, and its convertible bonds reached an astonishing 266 cents on the dollar, up from 90 cents in early June.

Investors 9fin spoke with also said those deals — in particular the one with AT&T — were priced at the higher end of the spectrum assets’ valuations.

For Silver Point, this meant top-notch returns. According to 9fin’s analysis, the firm’s stock holdings yielded an absolute return of approximately $331m, or 187%, with an annualized return of 803%, while its convertible bond holdings yielded an absolute return of roughly $352m, or 134%, with an annualized return of 592%.

In total, Silver Point’s stock and convert positions produced returns of more than half a billion dollars — approximately $670m — at an annualized return of 691%, according to 9fin estimates. For our return calculations, we assume Silver Point bought and/or sold securities at the end of each quarter at the then prevailing price, and that its holdings at the end of Q2 25 reflect current holdings.

Those numbers still don’t account for Silver Point’s significant positions in DISH DBS bonds — the 5.75% SSNs due 2028 and 7.75% SUNs due 2026 — which are now hovering around 95 and 98 cents on the dollar, respectively, up from the high-80s in the weeks before the deals were announced. The firm also has smaller positions in other EchoStar entities that have since traded up, a source said.

Silver Point is among a slate of hedge funds to have raked in massive gains from the change in Ergen’s fate, as 9fin reported, but its large stockholdings, which it ratcheted up massively in Q2, made it one of the largest hedge fund shareholders on a fully diluted basis.

Despite the record highs, the firm is still bullish on the company, a source said, noting that Ergen has more valuable spectrum assets available to sell, and that, as a part of its deal with SpaceX, EchoStar will be gaining an equity stake in the company. The deal could make Echostar the main publicly traded vehicle for retail investors wanting exposure to Elon Musk’s private space technology venture.

What would Ergen do?

The two spectrum deals still need to clear some regulatory hurdles, including antitrust clearance from the DOJ, and, for the AT&T sale, the modification of the April 2020 settlement that allowed T-Mobile to buy Sprint, as reported. Sources 9fin spoke with said they have faith the deals will go through, especially since the FCC did not raise objections.

Separately, certain DBS bondholders are still engaged in a legal fight with the company in which they accuse the subsidiary of illegally stripping their spectrum assets — including the to-be-sold AWS-4 and H-Block licenses — in transfers to EchoStar when the two companies merged.

The company is also staring down a number of maturities in 2026, including the DISH DBS-issued 5.25% SSNs due 2026 and 7.750% SUNs due 2026, on top of secured and unsecured bonds at the Hughes Network Systems subsidiary.

Proceeds from the spectrum sales are marked to pay off portions of EchoStar and DISH Network’s secured debt and redeem and convert the convertible bonds, but sources said excess proceeds could easily cover a TPG Angelo Gordon-led term loan facility due at the end of September and, in combination with cash flows, the DBS bonds due 2026, although there is no certainty Ergen would not deploy proceeds elsewhere.

“There’s ego involved here,” a long-time investor said. “It was never about the cap structure being covered but the game theories.”

Silver Point Capital declined to comment. EchoStar did not respond to a request for comment.

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