David Tepper's hedge fund, Appaloosa, took a minority stake in satellite company Intelsat on Tuesday and sent a letter to its board, urging the company to renegotiate terms of its 5G deal with the Federal Communications Commission.
"We want a smart agreement for all parties and this isn't smart for anybody," Tepper told CNBC's Scott Wapner.
Shares of Intelsat rose as much as 27% after Appaloosa announced a 7.4% stake.
The company's most valuable asset is its ownership of spectrum, which the FCC wants to reappropriate to use for 5G networks. Intelsat is laden with debt many times its market value, so the amount of compensation it would receive for giving up spectrum rights is critical to the satellite company's future.
Intelsat's move higher Tuesday comes after the stock dropped as low as $3.10 earlier this month, shortly after the FCC unveiled a plan that would see satellite operators receive up to $14.7 billion to cover the loss of spectrum.
Tepper said in his letter to Intelsat that he was "disappointed, to say the least, with the Board's and management's apparent acquiescence to the broad terms of the FCC's latest proposal."
"The token compensation offered to Intelsat is an affront when compared to the values achieved in auctions of comparable spectrum across the globe over the past decade," he said.
Tepper declared the terms of the FCC's proposal as "manifestly unfair to Intelsat" and told the company it should not accept a deal until it renegotiates. Otherwise, Intelsat's board "has no choice but to resort to bankruptcy and litigation in order to protect Intelsat's valuable license rights from an illegal modification," Tepper added.
Intelsat closed up 25.8% on Tuesday.