Why SpaceX stock is rising today
Key Points
SpaceX stock is rising after The Washington Post reported that the company has been in talks with EchoStar, the owner of Boost Mobile.
EchoStar's 7.4 million wireless subscribers could give SpaceX a base for Starlink Mobile, the satellite-and-ground network it hopes could rival AT&T, T-Mobile, and Verizon.
Boost has no towers of its own and rents capacity from AT&T and T-Mobile, both of which have already turned SpaceX down, so there are significant hurdles investors need to keep in mind.
Space Exploration Technologies Corp. (NASDAQ:SPCX) stock is up 3.2% as of 12:55 p.m. ET on Monday, Nov. 2, after a report that it's looking for a new way into the wireless mobile business.
The S&P 500 and the Nasdaq Composite are up 0.2% and 0.3%, respectively.
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Why a Boost Mobile deal could help SpaceX in wireless
The Washington Post reported that over the past few months, SpaceX has been in talks with EchoStar (NASDAQ:ECHO), the owner of the discount mobile brand Boost Mobile, about a possible deal to use its network or purchase the Boost brand. This would help SpaceX launch Starlink Mobile, a satellite-and-ground network it hopes could rival the big carriers like AT&T (NYSE:T), T-Mobile (NASDAQ:TMUS), and Verizon (NYSE:VZ).
EchoStar had 7.4 million wireless subscribers at the end of its last quarter. That could give SpaceX a nice base from which to build.
The hurdles facing a SpaceX Boost Mobile deal
Of course, there are some complications: Boost has no towers of its own. Instead, it rents capacity from AT&T and T-Mobile. That could be an issue given that SpaceX has already approached both companies (as well as Verizon) and was turned down.
Image source: Getty Images.
Still, the possibility of a deal was enough to lift the stock. Starlink Mobile could greatly expand the company's customer base and help SpaceX deliver the growth it's promised, but there are significant hurdles in getting there that investors need to keep in mind.
Johnny Rice has no position in any of the stocks mentioned. The Motley Fool recommends T-Mobile US and Verizon Communications. The Motley Fool has a disclosure policy.