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1. Ergen Economically IncorrectEchoStar Communications ( DISH) CEO Charlie Ergen is a smart guy. So how could he be so dumb last Friday?
Yes, after years of watching his success, we have no doubt that the folksy, plain-spoken chief of the Dish Network satellite service has a lot on the ball.
But during the company's week-ago conference call to discuss 2003 financials, we believe Ergen fell off that ball. It all started when investor Leon Cooperman -- a 25-year Goldman Sachs veteran who now heads Omega Advisors -- asked what we at the research lab think was a simple question: What was the average price per share that EchoStar paid in its recent stock buyback? "We're not disclosing that," Ergen replied. "You can figure it out. ... You might figure out some range that you can be comfortable with." This shocked us because we've sat through many conference calls in which this question has been uneventfully asked and answered. It shocked Cooperman, too, apparently. "I don't know any company publicly traded that refuses to give that information," Cooperman said. "I never heard of this. I've been doing this for 38 years." "Now you've heard of it," responded Ergen, whose folksy plainspokenness suddenly wasn't endearing as usual. Things went from awkward to weird when EchoStar general counsel David Moskowitz chimed in. "We're not going to provide information on this call that we haven't provided in the 10-K," Moskowitz said. "And so it's not a question we could address to you individually. ... The data you want, to the extent it's required, is provided to you in the 10-K." Which made no sense at all. Cooperman wasn't asking for information that wasn't in the 10-K -- he was asking to be saved the burden of finding the relevant numbers from the 194-page document and doing the math. (By the way, the per-share buyback figure, according to our calculations, was $32.19, toward the lower end of the stock's 52-week range of $27.33 to $41.) Not only that, but earlier on the call, EchoStar execs had done exactly what they told Cooperman they wouldn't do: give out a number that wasn't in the 10-K, though it could be calculated from numbers provided therein. Yes, EchoStar gave out fourth-quarter numbers for the closely watched figure of average subscriber-acquisition cost. Given that EchoStar gave out three alternate numbers for SAC, it appears that SAC is more of a judgment call than the calculation necessary to figure out the buyback price. In our minds, that undercuts Ergen's and Moskowitz's righteous reticence to do the quick math for Cooperman.