Observed Signal · Jun 3, 2026 · Financials · Source: CNBC Investing · Impact: 3/5 · Sentiment: Negative
AT&T downgraded over SpaceX Starlink broadband threat
Investment bank Oppenheimer downgraded AT&T from buy to perform, citing long-term competitive risk to broadband and mobile subscribers from SpaceX’s Starlink low‑Earth orbit satellite constellation. The downgrade came ahead of SpaceX’s planned Nasdaq IPO, for which Reuters reported a planned $135-per-share offering and an implied $1.75 trillion valuation. The Federal Communications Commission in April updated satellite spectrum‑sharing rules — the FCC said this could expand space‑based broadband access substantially — and an FCC commissioner noted satellites can enable direct‑to‑device services. Oppenheimer said cable is particularly vulnerable and that AT&T faces the most exposure among major U.S. telcos; however, the firm expects legacy broadband to hold up in the near term because Starlink service is relatively more expensive today.
Oppenheimer's downgrade, SpaceX's large IPO and recent FCC satellite spectrum rule changes could materially affect broadband competition and the strategic positioning of major telcos, with downstream implications for network access and distribution of digital services.
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Key Takeaways & Evidence Grounding
- Oppenheimer downgraded AT&T from buy to perform, citing competitive pressure from SpaceX/Starlink.
- Oppenheimer analyst Timothy Horan warned long‑term broadband and mobile subscriber growth is at risk from LEO satellite constellations.
- The FCC voted in April to update satellite spectrum‑sharing rules, which the agency said could boost space‑based broadband access.
- Reuters reported SpaceX plans to set its IPO price at $135 per share targeting an approximate $1.75 trillion valuation.
- AT&T shares were down about 12% over the prior three months and flat year‑to‑date at the time of the article.
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FCC Approves EchoStar Spectrum Sale to SpaceX, AT&T
The U.S. Federal Communications Commission approved EchoStar Corporation's planned sale of wireless spectrum totaling about $40 billion to SpaceX and AT&T. EchoStar will transfer roughly 50 MHz to AT&T for $23 billion (30 MHz mid-band, 20 MHz low-band) and 65 MHz to SpaceX for $17 billion. The FCC granted SpaceX waivers to use the spectrum across terrestrial, space-based, and hybrid architectures to support Starlink device-to-device capabilities, and imposed accelerated buildout requirements on AT&T. Regulators also required EchoStar to fund a $2.4 billion escrow to satisfy prior construction-related obligations and established a hybrid MVNO arrangement between AT&T and EchoStar to preserve Boost Mobile. The approval aims to speed 5G expansion, integrate satellite and terrestrial networks, and protect contractors while enabling new connectivity services.
Oppenheimer: SpaceX IPO Should Boost Iridium Stock
Oppenheimer said SpaceX’s upcoming IPO is a likely catalyst for Iridium Communications, upgrading the satellite operator with an outperform rating and raising its price target to $60 from $48. SpaceX is scheduled to list on the Nasdaq on June 12; Oppenheimer expects the company’s scale and planned Starship launch cadence to expand capacity in communications and broadband, creating demand opportunities for satellite-service providers that use SpaceX for launches. The note cites industry upside across the communications sector. LSEG data shows six of 11 analysts covering Iridium have buy or strong-buy ratings. Iridium shares have risen about 185% year-to-date.
SpaceX’s Post‑IPO Plunge Ahead of First Earnings
Investors are watching SpaceX ahead of its first quarterly report after the June 12 IPO, following a collapse that wiped out more than $500 billion of market value and left the stock over 50% below its intraday high. The company — with an implied market cap near $1.4 trillion — faces scrutiny over valuation and fundamentals: a price‑to‑sales ratio in the 70s, negative free cash flow, multibillion-dollar quarterly cash burn and debt roughly double cash. Strategic catalysts could justify the price if successful: making Starship reusable, expanding profitable Starlink connectivity while launches remain loss-making, building orbital and terrestrial data centers, and growing AI compute and products (Grok). Key commercial moves include large compute contracts with Google and Anthropic and a planned ~$60 billion acquisition of AI coding startup Cursor; short sellers have also posted sizable paper gains since the IPO.
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