seekingalpha.com/article/3448186-can-dish-pull-a-rabbit-out-of-its-hat-again?auth_param-aig37:1at6evk:993335804f425a4c8360172
Wall Street is reporting that DISH and T-mobile in Merger talks
- Thread starter MikeD-C05
- Start date
- Latest activity Latest activity:
- Replies 114
- Views 13K
Well, what kind of retro browser are you using? I get a pop-up un-dismissable registration window, and all the text around it is blurred out.
I tried putting in HolyMoses@TheBible.com, but it sends a verification email which of course I can't read. Sorry, but I refuse to register. Will one of you Safari users please give us a summary?
The point of the article is to note a conundrum regarding the spectrum they purchased. Ergen needs to find the remaining $3.3 billion that was lost when the FCC took away the small business discount and refused to double Ergen's 50 cents off coupon. But Ergen is barely able to pay for the spectrum in general, so there is a need to raise more capital (more debt) in order to keep what they bought.
The conundrum is the spectrum's value. It could be worth twice as much in a little while compared to what it is worth if he has to sell it immediately. Of course, there aren't many buyers around for that level of spectrum to be purchased.
If Ergen can save it, it'll be worth a lot more and it'd be a tremendous asset for the company. But he has to spend a good deal of money to keep it, money he doesn't have.
Long story short, IP tv will destroy cable/sat and the channel SDTV will be offered in HD soon on Dish.
The conundrum is the spectrum's value. It could be worth twice as much in a little while compared to what it is worth if he has to sell it immediately. Of course, there aren't many buyers around for that level of spectrum to be purchased.
If Ergen can save it, it'll be worth a lot more and it'd be a tremendous asset for the company. But he has to spend a good deal of money to keep it, money he doesn't have.
Long story short, IP tv will destroy cable/sat and the channel SDTV will be offered in HD soon on Dish.
Main three points:Can't read that without registering.Can we get a summary?
DISH denied a $3.3 billion small business discount on it's latest spectrum purchases by FCC.
DISH will have a tough time writing the $13 billion dollar check by October.
CEO Charlie Ergen has gotten out of tight spots before, with a profit.
Where is the problem? CASH. Ceo Charlie Ergen has a winning bid of $13 billion on a Picasso ,but can't write the check. The FCC is expecting upfront payments worth $44 billion on Oct. 15 and all the carriers are scrambling for cash between now and then. Ergen needs to pull a rabbit out of his hat , which is why DISH 's stock is so cheap, relative to the value of it's spectrum assets. IF you buy DISH today you are betting that he can.
Dish will come up with the money one way or another. They need to close the deal and have the spectrum asset. Then of course is the problem that they have just so many years to start using it...
I thought it was only a $3+billion in discounts that were being eliminated? While that represents a lot of money for a small company like Dish, it isn't enough to say it is the end. Ergen can sell part of the massive amount of Dish and Echostar stock he has to raise the funds or just borrow the money, if he has to. Dish had retired quite a bit of debt in the past, so it can be done. Dish has been in worse or more precarious financial position than this in its early days. I am betting he'll get the $3+ billion and hold on to the spectrum and probably sell it down the line when it does become more valuable, or keep it to increase Dish's worth to a potential buyer. Simply put, Ergen tried to get it at a discount, and he ended up not getting it, and now he has to pay the $3+billion discount. Not the end of Dish by any means. It like the feeling we all have when we have to pay the entire bill for the dinner after being told our discount coupon is out of date. It just wasn't what we were expecting to pay, and we grumble about it, but pay the full bill, we do.
Although now Ergen has stated that the FCC disallowing the discount is seen by him as a signal that the FCC doesn't really want a new entrant to wireless for increased competition. After all, Chairman Wheeler's buddies are all the big boys he knows quite well, direct competitors of Dish, and Verizon and AT&T got their discounts in previous auctions, and are we to believe those small companies were truly independent of the two leading wireless companies efforts during auction, not having the proverbial notes being passed from V and ATT in an effort to "direct" these smaller companies bidding strategy? PLEASE!
Dish can still challenge the FCC ruling in court, and could win. However, that may not be worth it to Dish of they feel the FCC is hostile to allowing another competitor to Verizon and AT&T. Then again, Ergen is litigious and may decide to take that route, but it might be a bit of an Oscar Wilde hubris if he does as his connections to those small companies might prove more problems than it is worth . We shall have to see what Dish decides
It just means that Ergen may have to give up his strategy of getting into the wireless business among the massive behemoth's. Ergen has always had the "Either I'm gonna write a check, or someone is gonna write me a check, and I'm out . . " scenario as a distinct possibility for years. He has always made it clear that Dish is competing against far larger and deep pocketed competition, and at some point, he may have to sell. No news there.
Of course, he can always go to Echostar to live out his remaining productive years and still leave intact his reputation of being among the smartest entrepreneurs ever with his humble beginnings of pretty much nothing to what he built with Echostar and later Dish when everyone thought he was crazy to go forward with Dish when everyone else fled the scene, and we mean far larger and deep pocketed companies such as NewsCorp (suing Rupert Murdoch and winning) and MCI among others, believing DirecTV had it all locked up. They all thought he'd be out of business within 3 months, and he is still around. This is a bump in the road for Ergen, but it may mean he will start to see selling Dish as the far more likely scenario for his future.
Although now Ergen has stated that the FCC disallowing the discount is seen by him as a signal that the FCC doesn't really want a new entrant to wireless for increased competition. After all, Chairman Wheeler's buddies are all the big boys he knows quite well, direct competitors of Dish, and Verizon and AT&T got their discounts in previous auctions, and are we to believe those small companies were truly independent of the two leading wireless companies efforts during auction, not having the proverbial notes being passed from V and ATT in an effort to "direct" these smaller companies bidding strategy? PLEASE!
Dish can still challenge the FCC ruling in court, and could win. However, that may not be worth it to Dish of they feel the FCC is hostile to allowing another competitor to Verizon and AT&T. Then again, Ergen is litigious and may decide to take that route, but it might be a bit of an Oscar Wilde hubris if he does as his connections to those small companies might prove more problems than it is worth . We shall have to see what Dish decides
It just means that Ergen may have to give up his strategy of getting into the wireless business among the massive behemoth's. Ergen has always had the "Either I'm gonna write a check, or someone is gonna write me a check, and I'm out . . " scenario as a distinct possibility for years. He has always made it clear that Dish is competing against far larger and deep pocketed competition, and at some point, he may have to sell. No news there.
Of course, he can always go to Echostar to live out his remaining productive years and still leave intact his reputation of being among the smartest entrepreneurs ever with his humble beginnings of pretty much nothing to what he built with Echostar and later Dish when everyone thought he was crazy to go forward with Dish when everyone else fled the scene, and we mean far larger and deep pocketed companies such as NewsCorp (suing Rupert Murdoch and winning) and MCI among others, believing DirecTV had it all locked up. They all thought he'd be out of business within 3 months, and he is still around. This is a bump in the road for Ergen, but it may mean he will start to see selling Dish as the far more likely scenario for his future.
Last edited:
I saw yesterday that COMCAST is looking at T-mobile for a take over now and VERIZON would be the best buyer of DISH and their accumulated bandwith. GOD help me ,if they get a hold of T-mobile . I will have to drop my phone company for sure.
