MDA Space shares fall sharply after EchoStar cancelled a US$1.3 billion satellite contract with the Canadian company. The stock sank nearly 20% in early Toronto trading, sliding C$8.78 to C$35.23.
EchoStar scrapped the contract as it struck a new deal with SpaceX. The agreement will transfer EchoStar’s AWS-4 and H-block spectrum licenses to SpaceX for about US$17 billion in cash and shares. Moreover, EchoStar customers will gain access to SpaceX’s Starlink Direct to Cell service under a separate partnership.
MDA Space emphasized that performance issues did not trigger the cancellation. Executives confirmed the company will receive full compensation for termination fees and related costs. The original deal, announced on August 1, positioned MDA Space as prime contractor for EchoStar’s low Earth orbit satellite constellation.
Investors, however, reacted swiftly. The sharp decline in MDA Space stock reflected concern over growth expectations. Analysts noted that the company had counted on the EchoStar project to boost revenue and strengthen its role in global satellite manufacturing.
Even with this setback, MDA Space highlighted long-term opportunities in space infrastructure and advanced satellite services. Furthermore, industry watchers said the move underscores shifting dynamics in the sector, as EchoStar pivots toward deeper collaboration with SpaceX. The development could reshape competition in satellite communications in the years ahead.
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