HN@PassionAndLuck
To everyone questioning SpaceX / $SPCX’s highly successful IPO and its $2.1T market cap, let me share what I believe is the best arbitrage setup.
Do you know $SATS?
$SATS is expected to receive 261.8M shares of $SPCX, worth roughly $42B based on the 6/12 closing price.
Yet SATS’ current market cap is only about $33B.
Short: $SPCX
Long: $SATS
$SATS will effectively own approximately 2% of SpaceX / SPCX.
According to the SPCX prospectus, in exchange for acquiring spectrum from SATS, SPCX will pay SATS 261.8M shares of SPCX stock, roughly $8.5B in cash, and an additional ~$2.0B in cash to cover interest payments that SATS would otherwise have been responsible for.
In addition, SATS is expected to sell roughly $23B of spectrum to $T.
The transactions with $T and SPCX were approved by the FCC on 5/12. If no petition for reconsideration was filed by 6/11, the approval should likely have become final automatically. As of 6/14, I have not confirmed any petition for reconsideration.
Also, the spectrum transfer structure is SATS → TRUST → SPCX. Since the SATS → TRUST transfer has already been completed, I believe the closing risk is relatively low.
Now let’s calculate $SATS NAV.
My base NAV assumptions:
SPCX ownership: approximately 2%
SATS basic shares outstanding: 298M
Fully diluted shares after convertible bonds: 348M
I use 348M shares in the calculation below.
Cash proceeds from spectrum sales to $T and $SPCX:
From $T: approximately $23B
From $SPCX: approximately $8B in cash
Total: approximately $31B
Assuming the convertible bonds are converted into equity, net cash after debt repayment would be roughly $11B.
Regulatory / escrow / contingent liability haircut: -$2.5B
Net cash after haircut: approximately $8.5B
Remaining operating business value: $10B
Based on roughly $300M of operating income in Q1 2026 × 4 quarters × 8x multiple.
Even after the spectrum sales to $T and $SPCX, SATS will retain remaining spectrum assets. The most notable example is AWS-3 paired spectrum, which SATS previously planned to sell to $VZ for approximately $9.8B.
If we conservatively value the remaining spectrum at $10B, that adds approximately $28.7 per share of NAV based on 348M shares.
Formula:
SATS NAV
= {SPCX market cap × 2% + net cash after haircut + remaining operating business value + remaining spectrum value} / 348M shares
= {SPCX market cap × 2% + $8.5B + $10B + $10B} / 348M shares
SATS NAV by SPCX market cap:
• SPCX $2.0T → SATS approximately $197
• SPCX $2.25T → SATS approximately $211
• SPCX $2.5T → SATS approximately $226
• SPCX $2.75T → SATS approximately $240
• SPCX $3.0T → SATS approximately $254
This is my personal analysis, not financial advice.
