Hometown boy succeeds

I went to high school with Charlie Ergen. He was two years older, so he was a senior when I was a sophomore. He was on the basketball team and student council and was senior class president. We didn’t share any classes or extracurricular activities. He graduated with a BA from the University of Tennessee-Knoxville and got an MBA from Wake Forest U. He was briefly a professional gambler, playing poker and blackjack.

In 1980 Ergen, his future wife Candy, and Jim DeFranco started EchoSphere Corporation. They drove around the Denver metro area selling satellite dishes from the back of a truck. Charlie also founded Dishnet and Echostar. In 2000, he first appeared in The World's Billionaires by Forbes with a net worth of $11.2 billion, making him the 21st richest person in the world at the time.

Charlie Ergen is still a gambler:

“Satellite cable pioneer Charlie Ergen made a big bet on spectrum and eventually found a buyer in SpaceX. The stock portion of that deal could be huge.

“By the end of 2013, satellite TV operator Dish Network had a nice business going, with just over 14 million subscribers.

“Dish and its sister company EchoStar (SATS) at the time represented the big bet that Charlie Ergen, a onetime professional gambler, made on the satellite TV business in the early 1980s.

“But then cord-cutting came along and slowly ate into those subscribers. Ergen, sensing the changing tide even before then, started buying up wireless spectrum as a means to eventually provide a wireless service, but he also saw hoarding the spectrum as an opportunity.

“He spent billions on it and didn’t do much to develop it, other than offering prepaid carrier service through Boost Mobile (which he acquired from Sprint’s collapse).

“Dish’s stock tumbled in the years that followed. Eventually, Ergen merged it with EchoStar in 2023, but the damage was done; Ergen’s net worth had dipped below $1 billion by then.

“But EchoStar held potentially billions of dollars’ worth of spectrum. This is what actually saved the company from a possible bankruptcy — and SpaceX is a big part of it.”

*snip*

“Though SpaceX’s Starlink service provided broadband internet from space to Starlink terminals, the company had started a direct-to-cell service, where customers could connect to the internet on unmodified cell phones using a combination of terrestrial wireless and satellite connectivity.”

*snip*

“So in theory, Ergen and EchoStar get a windfall from the upcoming SpaceX IPO, slated for this summer at the earliest, and can offer Boost Mobile users favorable satellite direct-to-cell service.”


What’s good for Charlie Ergen may not be so good for EchoStar investors, though:

“The private value assigned to SpaceX continues to increase, but we caution that EchoStar shareholders may not benefit fully,” Morningstar analyst Michael Hodel wrote in early March. “Management views these shares as a long-term holding, and shareholders would be taxed on gains upon a distribution,” meaning the value of the shares may not be unlocked, but if sold, the tax hit could be huge.”

https://finance.yahoo.com/markets/stocks/article/how-charlie-ergens-spacex-windfall-could-net-billions-140250505.html

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