SATS Opens New Conversion Window for Convertible Notes—What This Means for Investors

Convertible Note Holders Gain Flexibility with Additional Conversion Period

EchoStar Corporation (NASDAQ: SATS) has announced an extra conversion period for its 3.875% Convertible Senior Secured Notes due 2030. From January 1, 2026, to March 31, 2026, noteholders will be able to convert their notes into cash, SATS common shares, or a mix of both, at the company’s election. This move provides added flexibility for investors holding the notes, and could have implications for the company’s share structure and liquidity in the foreseeable future.

Conversion Triggered by Share Price Exceeding 130% of Conversion Price

So, why is this conversion window opening now? The trigger was the SATS share price, which exceeded 130% of the convertible notes' conversion price for at least 20 out of 30 consecutive trading days ending on December 31, 2025. This marked price strength in SATS shares has allowed noteholders the opportunity to take advantage of conversion terms earlier than the scheduled maturity.

Key Terms and How the Conversion Works

Let’s break down the mechanics investors should know:

Potential Impact: Dilution or Buyback?

The company will have discretion to settle conversions in cash, new common shares, or a mixture. If the option is settled in shares, there could be upward pressure on the share count—potentially diluting current shareholders. Conversely, opting for a cash settlement may limit dilution, but could have short-term implications on EchoStar's balance sheet.

It’s a balancing act. The flexibility to pay in shares or cash lets EchoStar choose the most advantageous path depending on market conditions and corporate strategy in early 2026.

What Should Investors Watch For?

While the company doesn’t make recommendations, investors should pay close attention to the market price of SATS leading up to and during the conversion period. If shares remain well above the $33.63 conversion price, noteholders have an incentive to swap into equity, especially if they believe the upside will continue.

Shareholders may want to monitor any communications from the company on anticipated dilution or cash use, as these decisions could sway short-term sentiment or share price stability in 2026. The company’s flexibility may lead to different outcomes based on prevailing financial or market conditions.

Bottom Line: Added Optionality for Noteholders, Variable Impact for Shareholders

This added conversion window gives SATS noteholders more flexibility and, for shareholders, raises key considerations about future equity dilution or balance sheet impacts. As the window approaches, keep an eye out for further company updates and watch investor sentiment around these conversion dynamics as they unfold.

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