By Adam Clark and George Glover
Legacy satellite stocks became hot properties ahead of the SpaceX IPO, but time is running out for the companies to justify their meteoric gains.
ViaSat is up close to 500% in the past year, EchoStar has risen more than 600% and Iridium Communications has nearly tripled. What's behind it? The spectrum they own -- electromagnetic frequencies used to carry signals.
Elon Musk's SpaceX, Amazon, and AST SpaceMobile are racing to deliver broadband from space. Spectrum is a key asset, determining who can deliver the best and most reliable service. That means companies with spectrum to sell stand to make huge profits.
But time is scarce -- the first company to sell will likely rake in the best price. Meanwhile, terrestrial carriers are looking to fight back and the Federal Communications Commission is auctioning more spectrum, too. If ViaSat and Iridium can't complete deals, their stocks could be hit hard.
Spectrum Sellers
Putting things in space is suddenly popular. While missions to Mars and data centers in orbit are distant prospects, providing internet to mobile phones via satellites is a near-term opportunity.
One approach is to lease terrestrial spectrum from carriers like AT&T and Verizon and extend its reach via satellites. However, those frequencies have limited capacity and interference issues. Alternatively, operators can acquire spectrum reserved for mobile satellite services $(MSS)$. Licenses for MSS spectrum have become extremely valuable, benefiting ViaSat, Iridium, and EchoStar.
EchoStar already struck its big deal. SpaceX reached a $17 billion cash-plus-stock agreement to buy licenses for 65 megahertz (MHz) of spectrum from EchoStar last year. EchoStar stock has risen fourfold since the deal, and largely trades as a play on SpaceX's pricing.
Now attention turns to ViaSat and Iridium.
ViaSat holds a portfolio including L-band spectrum -- prized for its ability to carry signals over long distances and penetrate obstacles. Overall, ViaSat's 68 MHz of global spectrum could be worth $15 billion, according to Raymond James analysts, though William Blair analysts estimate it's closer to $10 billion.
ViaSat stock has risen 538% in the past 12 months to trade at around $73, giving it a market value of around $9.93 billion, or an enterprise value of $15.42 billion, including debt.
"With scarce, high-quality direct-to-device spectrum seeing strong marks in recent transactions...we think Viasat's portfolio, arguably the largest and cleanest globally, represents meaningful upside," wrote Raymond James analyst Brent Penter in a May research note.
One complication remains: ViaSat has pledged to pool its spectrum in a joint venture with U.A.E.-based Space42.
"Most investors would rather ViaSat...monetize its L-band spectrum instead of becoming the fourth competitor in the direct-to-device industry," William Blair analyst Louie DiPalma said in a recent note.
When asked on its recent earnings call if ViaSat plans to sell its spectrum, CEO Mark Dankberg told analysts the company would keep its options open and that it wouldn't necessarily need all of its spectrum for the Space42 joint venture.
Iridium is also gaining major attention. Its shares have risen 187% this year to trade at around $50, putting its market valuation at $5.52 billion or its enterprise value at $7.13 billion, according to FactSet.
Iridium holds around nine MHz of L-band spectrum, which Penter values at around $3.5 billion, rating the stock at Market Perform with no price target.
Iridium didn't respond to a request for comment, though CEO Matt Desch said on a February earnings call that the company would "continuously consider" its assets.
Spectrum Buyers
Potential sales rely on motivated buyers -- fortunately there are several, including SpaceX, Amazon, and AST SpaceMobile.
SpaceX is the big name as it builds its Starlink Mobile service for a satellite-internet market it claims is worth up to $740 billion. SpaceX stated in its IPO filing that next-generation satellites could support a network equivalent to terrestrial carriers and it may pursue additional spectrum acquisitions.
Amazon is another potential buyer, building its Project Leo satellite constellation. Amazon recently agreed to acquire Globalstar for nearly $12 billion, including licenses for around 25 megahertz of MSS spectrum. However, its spectrum portfolio remains smaller than SpaceX's.
"Both SpaceX and Amazon Leo are likely to need to add meaningfully to their owned spectrum portfolios," wrote KeyBanc analyst Brandon Nispel following the Globalstar deal. SpaceX and Amazon didn't respond to requests for comment.
The dream scenario for SpaceX and Amazon is that they could eventually supplant terrestrial carriers as the main providers of wireless networks by promising seamless global coverage. That would justify massive investment in satellite-specific spectrum to ensure network quality.
But the U.S. wireless carriers aren't waiting to be cut out of their own business. AT&T, Verizon, and T-Mobile recently formed a joint venture, pooling spectrum to help satellite customers reach remote regions.
AT&T and Verizon both have spectrum-leasing deals with satellite operator AST SpaceMobile. Doubling down on satellite partnerships shows they "don't want to be beholden to a SpaceX monopoly," Craig Moffett, analyst at MoffettNathanson, told Barron's.
AST SpaceMobile's carrier relationships mean it might stand aside from the spectrum race. It has an agreement to lease up to 40 MHz of L-Band spectrum in the U.S. and Canada for eighty years. AST SpaceMobile President Scott Wisniewski told Barron's the company will be "conservative" on acquisitions.
"Our strategy is very much one of sharing cellular spectrum...that our partners have that is available and that our satellites can put to good use," Wisniewski said.
Clinching a Deal
The big question for SpaceX, Amazon, and investors betting on megadeals is how large the satellite-broadband market really is. Satellites usually complement rather than compete with wireless offerings because low-frequency spectrum struggles to penetrate indoors.
"If you're camping in Yosemite or Yellowstone then having that connectivity is worth paying for -- but most people don't do that," said Moffett. "For the majority of consumers it's probably in the back of your mind, a nice thing to have, but you'll never end up using it."
Not everyone agrees. FCC Chair Brendan Carr advocates for satellite networks, clearing SpaceX's EchoStar spectrum acquisition, calling it a "potential game changer" and noting that more than $28 billion has been spent across 130 MHz of spectrum for direct-to-device connections.
Carr stated the FCC will release approximately 300 MHz of low- and mid-band spectrum by the end of 2027.
ViaSat and Iridium will watch closely. While high prices validate their assets, auctions could reduce the need for SpaceX and Amazon to buy spectrum. Stocks that have rocketed higher on expectations of huge spectrum sales could easily fall to Earth unless they seal the deal soon.
Write to Adam Clark at adam.clark@barrons.com and George Glover at george.glover@dowjones.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
June 15, 2026 02:00 ET (06:00 GMT)
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