Key insights
- The author suggests that SATS (EchoStar) and XOVR (ERShares Crossover ETF) offer an arbitrage opportunity based on their current holdings of SpaceX equity acquired at valuations significantly lower than the projected IPO valuation. If SpaceX IPO proceeds as planned, SATS and XOVR could see substantial gains. However, the market may be discounting these holdings due to liquidity concerns or uncertainty around the IPO itself.
With SpaceX reportedly targeting a June 2026 IPO at a $1.75 trillion valuation, Looking into this I’ve found 2 proxies: $SATS (EchoStar) and $XOVR (ERShares Crossover).
The part I can’t wrap my head around is the massive valuation gap between where these two are buying in and the projected IPO price. Am I missing something, or is this a blatant arbitrage play?
The $SATS Math:
EchoStar just closed a spectrum deal where they received $11.1 billion in SpaceX equity. Here’s the kicker, at the time of the deal, that stake was valued at a SpaceX valuation of roughly $400B – $800B.
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If SpaceX hits its $1.75T IPO target, $SATS’s stake is suddenly worth $25B – $30B.
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The Arbitrage: $SATS has a current market cap of only $25B. You are essentially buying the SpaceX stake at cost and getting the entire DISH/Boost Mobile business (which just reported a 64% beat on EBITDA) for free.
The $XOVR Concentration:
This ETF currently holds a SpaceX SPV that makes up nearly 45% of its net assets. They recently revalued their SpaceX stake to $526/share, which implies an $800B valuation.
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At a $1.75T IPO, that’s a 2.2x gain on almost half the fund’s weight.
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Unlike other space ETFs that are bloated with slow-growth defense contractors, $XOVR is essentially a levered bet on SpaceX’s private-to-public transition.
The Question:
If both $SATS and $XOVR acquired their shares at a 50%–70% discount compared to the projected IPO price, why isn't the market pricing this in yet? Is there a hidden "liquidity discount" because these are private shares, or are we looking at a guaranteed "pop" for these tickers the second the S-1 is officially filed?
Are these the most profitable ways to play the IPO, or will the "proxy noise" get ignored once retail can buy the real thing?
TL;DR
Are SATS and XOVR the best pre IPO spacex plays?