Al Root
Elon Musk's rocket company, SpaceX, acquired his AI company xAI on Monday.
It was a blockbuster move, combining two of the world's most valuable privately held companies ahead of an expected midyear initial public offering of SpaceX stock. The deal valued the combined SpaceX at $1 trillion, according to reports. SpaceX didn't respond to a request for comment about deal pricing.
To see what the market thinks of the combination, investors can look at shares of satellite-communications company EchoStar, because it owns a lot of SpaceX stock.
Trading on Tuesday, after the deal, however, was a little odd.
In September, EchoStar announced a deal to sell its AWS-4 and H-block spectrum licenses to SpaceX. Spectrum -- the frequencies over which wireless calls travel -- is a finite resource that every mobile company needs. As part of the deal, EchoStar got $8.5 billion in SpaceX stock. EchoStar got another $2.6 billion in SpaceX stock by selling more spectrum in November.
So EchoStar owns about $11.1 billion in SpaceX stock, acquired when SpaceX was valued at $400 billion. EchoStar stock traded at about $67 per share before the September sale. Since September, SpaceX's valuation has doubled to $800 billion, and it is reportedly seeking an IPO valuation of $1.5 trillion. Meanwhile, EchoStar shares have risen 73%, adding about $14 billion in market value. EchoStar shares closed at $116.55 on Monday.
EchoStar stock was up another 3.8% in premarket trading on Tuesday, at $121. Shares gave up gains, however, closing down 1.5% at $114.82, while the S&P 500 and Dow Jones Industrial Average lost 0.8% and 0.3%, respectively.
Trading in SpaceX proxies was uneven, though. Shares of Korean asset manager Mirae Asset, which invested in SpaceX in 2022, rose 25% in overseas trading. The Destiny Tech100 exchange-traded fund, which owns SpaceX stock, gained 7.5%.
Those moves show investors were excited about the SpaceX/xAI valuation. A 25% boost should make Echostar's SpaceX stock $5 billion to $6 billion more valuable. The market just hasn't adjusted yet.
Using a publicly traded stock as a proxy for a privately held company provides only a rough approximation of the private firm's worth. The value of EchoStar's non-SpaceX assets changes over time, and investors are always adjusting values based on new SpaceX IPO details. Still, after the SpaceX-xAI merger and ahead of the SpaceX IPO, EchoStar stock remains one of the best ways for investors to get exposure to SpaceX.
Write to Al Root at allen.root@dowjones.com
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(END) Dow Jones Newswires
February 03, 2026 16:15 ET (21:15 GMT)
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