Shares of MDA Space Ltd. fell sharply Monday as the high-tech manufacturer lost a recently announced contract with EchoStar Corp.
EchoStar cancelled the deal as it separately announced an agreement to sell its spectrum licenses to SpaceX for about US$17 billion in cash and shares, as the Elon Musk-founded SpaceX pushes further into providing satellite-based internet services directly to smartphones.
The decision by EchoStar to abruptly abandon plans to develop its own space-based network, and instead sell its AWS-4 and H-block spectrum rights to SpaceX, caught MDA Space by surprise, said chief executive Mike Greenley.
“This is a very unexpected event,” he said on a hastily arranged analyst call.
“This is obviously very sudden and a drastic change to the entire trajectory of EchoStar’s business. And so that’s a highly, highly unusual situation.”
The about-face means MDA Space is losing its contract to be the primary supplier for EchoStar’s low Earth orbit satellite constellation. The initial contract announced on Aug. 1 was valued at about US$1.3 billion, while it had the potential to grow to US$2.5 billion.
MDA Space said the EchoStar contract termination is unrelated to its performance and that it will be compensated for all related termination costs and fees under the agreement. The amounts owed were not disclosed.
It also noted it still has a $4.6 billion backlog of deals excluding EchoStar, and the company reiterated its 2025 financial outlook and guidance, but shares were still down about $8.76, or 20 per cent, at $35.25 as of midday on the Toronto Stock Exchange.
The loss, however, puts its shares back to about where they were trading in early summer and still more than double the price of a year ago.
EchoStar was set to be MDA Space’s anchor customer for its new 5G-capable satellites, but the company is also in talks with other firms to be a provider in an accelerating market, said Greenley. He said the August deal caused thinks to perk up, and this latest development will likely add to interest.
“If now SpaceX has that spectrum, and they’re going to get on with building that same network that EchoStar was going to build, it at least equally if not further adds to the giddy-up feeling for those in the market, which is that we better get going here because things are moving.”
Interest in the satellite-provider market is also rising as geopolitical tensions rise globally, he said.
“We’ve already seen in 2025, a fair amount of geopolitical activity, of countries and corporations in countries outside the United States wanting to stand up a bit taller, and work on and improve their high-tech, their defence, their security, their sovereignty.”
MDA Space, originally known as MacDonald, Dettwiler & Associates, also has contracts in place to design and deliver the flight system for the Canadarm3, satellites for Globalstar’s broadband network and robotics on the International Space Station.
This report by The Canadian Press was first published Sept. 8, 2025.
Companies in this story: (TSX:MDA)
