Dish Network Corporation (NASDAQ: DISH), the American television provider, has been in talks for a grand merger with DirecTV since a long time now. Moreover, there is a recent news about the merger actually happening in reality in the year 2022. The news kept the stock soarijg yesterday and even in today’s pre-market trading session.
DISH stock performance
The DISH stock was up by 4.38% and was priced at $36.93 (up by 1.55 points) at 8:53 a.m ET in the pre-market session today. The market capitalization stood at 18.7 billion. The share volume traded yesterday was 5,003,255, close to double of the average share volume of 2,915,529. Yesterday, the DISH stock gained a good 4.21% and closed at $35.38 (up 1.43 points). Moreover, last week, on Friday, it closed at $34.38, gaining a substantial 4.3% from its previous close of $32.96.
Analyst’s Comment on the Merger
After taking a year off from trumpeting a satellite provider tie-up in 2021, Lightshed returned to its theory that a Dish Network and DirecTV combination is necessary given the prevalence of cord cutting.
“We believe the regulatory risks today are not high given the state of the Pay TV market. Frankly, if Dish Network Chairman Charlie Ergen can’t get it announced this year, it might never happen.”– mentioned Rich Greenfield
According to Rich Greenfield, the Lightshed analyst, the synergy potential of a satellite merger have dwindled over the years, and if DirecTV doesn’t extend its NFL Sunday Ticket arrangement, it could face increased churn.
“Despite the lost synergies, this will be welcome news to Dish and AT&T investors. AT&T structured its DirecTV deal with TPG such that it would benefit from the synergies in a combo with Dish. AT&T would benefit from higher distributions that we believe it would use to fund a share repurchase program as early as next year.”– commented the analyst.
Combining Dish Network and DirecTV, as well as its virtual MVPDs Sling TV and DirecTV Stream, in the future will result in becoming the largest pay TV operator in the United States, with more than 20 million members.