Analyst Kannan Venkateshwar, who left his price target at $31, wrote in a note to investors that both Dish and T-Mobile (TMUS - Get Report) "have a tricky transition path to wade through" after the U.S. Justice Department on Friday approved the $26.5 billion merger of T-Mobile and Sprint (S - Get Report) .
The transaction was contingent on concessions ironed out between the two companies, which includes selling assets to Dish Network to even out the competitive playing field.
The settlement requires T-Mobile and Sprint to divest Sprint's prepaid business, including Boost Mobile, Virgin Mobile, and Sprint prepaid, to Dish Network. The settlement also provides for the divestiture of certain spectrum assets to Dish.
Venkateshwar wrote that Dish needs to raise capital, come up with a product and go-to-market strategy and build a network in a very short time. Dish's capital structure is likely to undergo major changes to fund its wireless venture, he said, which is likely to be dilutive for existing equity holders.
The analyst added that the deal is unlikely to create "major upside" for Dish equity holders.
The Dish Network reports earnings this week.
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