• Short sellers trade against the move: since January, EchoStar’s short interest has risen when the stock rises and fallen when it falls, with a monthly correlation of 0.8. SpaceX was one reason: before its IPO, ECHO served as a proxy for shorting SpaceX.

• Longs make the same trade: active long interest falls when the stock rises and rises when it falls, with a monthly correlation of −0.5, so both groups sell into gains and buy into losses.

• The stock peaked near $142 after the May regulatory approvals, then fell as SpaceX listed and two subsidiaries filed for bankruptcy. The pattern held throughout.

• EchoStar’s convertible bonds are deep in the money, so they trade like the stock. Their hedge ratio is close to 100%, so little re-hedging is needed. As a result, the bonds can help explain part of the level of short interest but not the changes in it.

• Short interest moves with the stock (monthly correlation: 0.8): a 1% rise in the stock has come with about a 1% relative rise in short interest. Shorts add into rallies and cover into declines, betting against the move.

• Active long interest moves the other way (monthly correlation: −0.5). Longs take profits on rallies and buy on dips, so both groups trade against the stock’s direction.

• Before SpaceX went public, investors bought EchoStar for SpaceX exposure, and holders of SpaceX exposure likely shorted it as a hedge. After the IPO, EchoStar fell while SPCX rallied, and short interest dropped once investors could short SpaceX directly.

• EchoStar’s market value of about $26B is well below the roughly $42B value of the SpaceX shares it will receive, and analysts estimate it stays below even after debt and taxes. That supports a relative-value trade, long ECHO and short SPCX, with risks around timing, taxes and the SpaceX share count. The closing, targeted for Nov. 30, 2027, is the next catalyst.

• The spectrum sales to AT&T and SpaceX eased fears that EchoStar would go bankrupt. The stock rose to about $142 after regulators approved them on May 12.

• It then fell as SpaceX went public, the AT&T closing was delayed, and two subsidiaries filed for bankruptcy. It hit about $84 in early August, as SPCX hit its post-IPO low, and has since traded between $84 and $100. DISH DBS emerged from bankruptcy on Oct. 1.

• Analysts remain bullish, mainly because of EchoStar’s SpaceX stake and remaining spectrum.

• Some investors are skeptical, citing valuation models showing the stock as overvalued and core businesses with declining revenue and cash flow.

• After the closing, positioning will depend on whether EchoStar keeps its SPCX shares, whether ECHO trades at a premium or discount to that stake, and how the convertible notes are settled. Settlement in ECHO stock would cover convertible hedges, lowering short interest.

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