GA-Courtenay Special Situations Fund on EchoStar Corporation
Thesis
EchoStar provides the fund with additional indirect exposure to SpaceX. After a 25% decline during the year, the manager's sum-of-the-parts work indicated that EchoStar's market capitalization was below the value of its cash and spectrum assets excluding SpaceX, effectively assigning a negative value to the SpaceX stake. The manager estimated that EchoStar could rise another 7% before the implied look-through value of the SpaceX holding merely reached zero.
“EchoStar now embeds its SpaceX holding at a negative value.”
Key risks
- The sum-of-the-parts valuation depends on the fund's appraisal of EchoStar's cash and spectrum assets.
- The investment case is sensitive to the value of EchoStar's SpaceX stake.