Dish and EchoStar Merger Is On: Here’s How the Dish Stock Price Fared

Key takeaways

• Sibling companies Dish and EchoStar have announced their intention to merge
• The two businesses have seen drastically different fortunes this year, with Dish ailing and EchoStar on the rise
• Dish’s share price soared by nearly 10%, but EchoStar only gained 1%

A new power player in the telecoms industry might be about to emerge. Dish Network and EchoStar have announced that they’re merging into one company, creating the combined power to rival the likes of Verizon and AT&T.

It’s a bold rescue plan for Dish, which has seen better days, but EchoStar shareholders might not appreciate taking on an ailing asset. We’ve got the latest on the announcement and how the stock market reacted to the news.

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Are Dish and EchoStar merging?

Telecoms companies Dish and EchoStar have announced plans to merge, with EchoStar investors set to get 2.85 shares of Dish for each EchoStar share.

Billionaire Charlie Ergen is chairman of both companies. If it goes ahead, the deal will create a $6 billion company, consolidating Ergen’s position and making raising funds to build a wireless 5G network easier. Dish has previously stated it expects new infrastructure to cost in the region of $10 billion.

It’s possible some shareholders might not be happy with the move. Dish has been hemorrhaging money as it’s struggled to entice subscribers to stay and manage a significant debt load. In comparison, EchoStar has $1.7 billion in cash (as of March 1) and should benefit from the Jupiter 3 comms satellite launch. The two companies’ fortunes could not look less alike.

What was Wall Street’s reaction?

Dish saw a 9.5% increase in its share price by Tuesday’s trading close, while EchoStar climbed 1%. That was after both companies saw a brief dip in share prices at the announcement, suggesting investors had doubts about tying the two companies together.

The latter’s share price has increased nearly 30% in the last month alone, whereas Dish has dropped to a two-decade low and has shed 40% of its value this year. Would-be competitors Verizon and AT&T saw a slight boost to their shares as well: Verizon had a 0.12% lift, and AT&T climbed 1%.

The bottom line

A whole new 5G infrastructure will take years to build, so Wall Street will look at the long-term investment potential that could result from the merger. Let’s not forget it is a satellite company, and we’re seeing some exciting moves in the satellite internet space that Ergen likely wants to capitalize on.

A big merger like Dish and EchoStar suggests that even more value could be found in the tech market in the next few months. Get in on the action with Q.ai’s Emerging Tech Kit. By packaging tech stocks and ETFs under the guidance of a diligent AI algorithm, the Kit helps you stay ahead of the curve without the upfront work.

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