Investors Debate: Dish A Target After DirecTV Buy

Dish Network, $DISH, shares vacillated between red and green Monday as investors debated whether AT&T’s, $T, $48.5 billion buy of satellite company DirecTV, $DTV, made Dish more or less attractive to a potential acquirer.

The bulls argued that AT&T’s potential merger with a satellite company forced competitors Verizon, $VZ, Sprint, $S, and T-Mobile, $TMUS, to find their own satellite provider. They pointed to reported talks between Dish and Verizon as evidence of the interest from telecommunications companies.

$DISH $VZ #DEALREPORTER held talks…

— Mitch (@Mitchnole) May. 19 at 01:52 PM


$DISH is next now that $T and $DTV deal is done @ $95 / share.

— Ophir Gottlieb (@OphirGottlieb) May. 18 at 06:31 PM

Telecommunications providers are interested in expanding their offerings to include television service, in part, because cable companies have encroached upon their turf with Internet-delivered voice service. Many cable companies, such as Cablevision, $CVC, offer phone service bundled with television and Internet that promise low rates and one bill.

But bears argued that the DirecTV/AT&T deal made Dish Network less attractive. Two of the most likely acquirers for the satellite service were AT&T and DirecTV, they argued. If they’re no longer in the market, than Dish may have to go it alone against a much stronger competitor. The stock fell 0.7%.

$DISH VZ said they're not interested in any more deals……what you buyers are doing is allowing the MM's to unload their positions on you

— Andrea (@ajohnke) May. 19 at 01:58 PM

Two firms, Hanson and MoffettNathanson, downgraded Dish to a sell on the DirecTV deal news.

However, not all analysts were in the bear camp. In addition to satellite television service, Dish has spectrum that also makes it attractive to telecommunications companies hoping to offer compelling Internet, TV and phone service bundles. Wells Fargo analyst Marci Ryvicker said that Dish Network and Sprint could still team up—and that would be the preferred outcome for the satellite provider.

Investors also cautioned that the DirecTV deal was not a fait accompli. It could face regulatory hurdles and is dependent on the National Football League continuing to let DirecTV air all Sunday football games.

$T $DTV prediction: Charlie Ergan will do something to stop, screw up and/or delay this deal $DISH

— stoutopinion (@stoutopinion) May. 19 at 08:36 AM


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