UPDATED with closing stock price. Shares in EchoStar fell 5% on heavy volume Tuesday in their first trading day after the close of the company’s merger with corporate sibling Dish Network.
The stock finished at $15.71 on volume that was more than four times the average level. The tech-heavy Nasdaq dropped 1.6% on the day after a number of big names like Apple came under pressure.
EchoStar, which focuses on wireless businesses, and pay-TV provider Dish were both co-founded by Charlie Ergen, who is now executive chairman of the combined company. Their all-stock merger, announced last summer, closed on Sunday. Stock markets were idle on Monday due to the New Year’s holiday.
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Shares in EchoStar were flat Tuesday morning on the first day of trading since the closing of the wireless firm’s merger with Dish Network.
The all-stock deal, announced last summer, officially closed on Sunday. Dish had been its own separate entity since being spun off by EchoStar in 2008. The reunion offers Charlie Ergen a bit more runway to try to execute his strategic turn away from pay-TV and toward wireless, though EchoStar is for now the No. 4 player in a competitive market led by Verizon and AT&T.
The 70-year-old Ergen, long known as a maverick negotiator and an outspoken critic of traditional pay-TV bundle economics, will be executive chairman of the combined company. He co-founded both companies and previously served as their chairman. Hamid Akhavan, head of EchoStar since March 2022, added the CEO duties at Dish in November. Former Dish CEO Erik Carlson exited as part of the merger.
The combined company, headquartered in Englewood, CO, will continue to operate Dish TV and Sling TV, positioning them alongside consumer and business brands like Boost Mobile, EchoStar, and the Hughes and Jupiter satellite services.
Dish had been struggling with a large debt load and a steady decrease in customers, with the pay-TV subscriber base declining by one-third over the past 10 years, settling at 8.8 million as of September 30. Last Friday, in its final day of trading on the Nasdaq, Dish stock closed at $5.77. It had plunged from its 52-week high near $16, establishing a 25-year low last November after a dismal third-quarter earnings report. Ergen at the time conceded to Wall Street analysts that the company would have to travel a “narrow path” to reach financial stability.
EchoStar shares have hovered around $16.50 today, giving the company a market value of nearly $1.4 billion.
“The completion of this merger marks an important milestone for our company and our customers, launching a new era of connectivity,” Ergen said today in a press release. “We have brought together two trailblazing companies with complementary portfolios to create a global connectivity leader with premier wireless, satellite, and video distribution capabilities. Together, EchoStar and Dish offer an enhanced consumer connectivity business and an unmatched enterprise managed services business. In a world that is increasingly wireless, we are well-positioned to drive revenue and profitable growth.”
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Source: DLine
