This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Dish Still Has Options on its Plate

NEW YORK ( TheStreet) -- In a surprise move Friday, Dish Network (DISH - Get Report) said it won't continue its pursuit of Sprint (S), even though Chairman Charlie Ergen still had time to submit a new offer to block SoftBank's deal to buy Dish.

Ergen ended an eight-month drama, and may have ended Dish's interest in Clearwire (CLWR), which Sprint has been battling Dish to preserve.

Meanwhile, SoftBank, which last week increased its bid to buy Sprint to $21.6 billion, is the biggest winner here, especially since Sprint's attractiveness was due in part to its stake in Clearwire, which has valuable wireless spectrum.

SoftBank can now enter the U.S. wireless market. CEO Masayoshi Son says the Japanese wireless market has become saturated.

The offer for Sprint, the third largest wireless carrier in the U.S., will be voted upon by shareholders on Tuesday. The deal would give SoftBank 80% of Sprint. Both sides feel that the deal could be closed as early as July. I don't see a scenario where it won't be approved, especially since Sprint's largest shareholder, Paulson & Co., supports the transaction.

Last week, I described Ergen's maneuvering for Sprint and Clearwire as a manner of survival. Now Ergen is admitting that he couldn't keep up with SoftBank's seemingly endless ammunition. But nothing's changed. Ergen still needs to act.

The satellite TV industry like cable, has limited upside. It is still under attack from the emergence of pay TV/entertainment outlets like Netflix (NFLX - Get Report) and Amazon's (AMZN) Prime. And the sector is getting more crowded with Apple's (AAPL - Get Report) iTV and possibly Intel (INTC - Get Report).

What's more, Dish remains in a battle with DirecTV (DTV). Dish trades at a premium to DirecTV, even though DirecTV has done much better in metrics like revenue growth, gross margin and operating margin.

The disparity between Dish's stock and that of DirecTV is more glaring with Dish's mobile broadband strategy now seemingly off the table. Dish investors are left to wonder what Ergen is going to do next to respond in these games of thrones. HBO would be proud.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
DTV $0.00 0.00%
CLWR $0.00 0.00%
AAPL $95.18 1.64%
DISH $47.39 -3.13%
INTC $30.36 -0.82%


Chart of I:DJI
DOW 17,750.91 -140.25 -0.78%
S&P 500 2,063.37 -18.06 -0.87%
NASDAQ 4,763.2240 -54.37 -1.13%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs