How to buy SpaceX at a 20% discount

Dear Reader,

This is Dylan Jovine with Behind the Markets.

Happy Friday.

Today is Friday the 10th.

TGIF.

Today I want to talk about how to buy SpaceX at a 20% discount.

This is for folks who haven't pulled the trigger on SpaceX yet, or who want to add to their position without chasing the price.

There's an interesting arbitrage that's opened up, and two Wall Street banks just pointed it out.

The Setup

EchoStar (SYM: ECHO) is trading around $95 a share.

The company has had a lot of trouble — bleeding subscribers in its pay TV and broadband divisions, and its DISH unit filed for Chapter 11 bankruptcy.

But here's the thing most people aren't focused on.

EchoStar holds a $42.4 billion stake in SpaceX.

That stake alone translates to roughly $121 per EchoStar share.

EchoStar is trading at $95.

In other words, you are buying EchoStar at a 20% discount to just its SpaceX stake — and getting all of EchoStar's other assets for free.

Think about that for a second.

Imagine Berkshire Hathaway — the entire company — trading at a 20% discount to just its stake in Apple or Coca-Cola.

That's the situation here.

What the Banks Are Saying

Deutsche Bank came out this week and said EchoStar should be trading at $143 — about 40% above where it sits today.

Citibank said it should be at least $126, suggesting 28% upside from here.

Their argument is simple.

A gap this large between a company and its biggest asset shouldn't exist.

When you own such a big piece of something else, you end up trading around the gravity of the bigger object.

EchoStar should be trading much closer to parity with its SpaceX stake.

It's not.

That's the opportunity.

One Thing to Keep in Mind

This isn't a pure SpaceX play.

EchoStar's other assets are having trouble, and that's real.

But at these prices, you're essentially getting those assets for free.

Charlie built some good things over there over the years.

And at a 20% discount to the SpaceX stake alone, the math is hard to ignore.

A Personal Note

This is my last video for a couple of weeks.

We're hitting the road — driving across the country with the family.

I want my kids to see this beautiful, bountiful country we are so privileged to live in.

I want them to be proud Americans.

I look forward to seeing you when I get back.

In the meantime, we have great editorial lined up for you.

I've even been pushing Simmy to film a video or two in my absence — but he's a little camera shy.

We'll see.

Have a wonderful weekend.

God bless you, and God bless America.

“The Buck Stops Here,”