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Media

EchoStar Feels The Subprime (and FTTH) Pressures Too (DISH, T, DTV)

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By Douglas A. McIntyre Updated Published
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This morning’s post-earnings downgrade of EchoStar Communications Corp. (NASDAQ:DISH) from a "Buy" to a "Hold" at Citigroup, is having a much broader impact than it originally seemed.  Shares were not indicated this much lower at 7:15 AM EST, but shares are now down almost 13% at $42.28 in mid-morning trading.

It seems that the subprime mortgage mess is increasing the churn rates in the customer base, at least that is what the company indicated on Friday with its earnings filing.   If AT&T (NYSE:T) is really looking to acquire the satellite television operations, it sure looks like the price of playing poker just got a lot cheaper.  What will this mean to Echostar’s review for a restructuring?  The woes at cable companies and the fiber-to-the-home initiatives from the Bells has created a perfect storm where maybe they all lose, at least on pricing power and on margins from the old triple-play packages.

For some reason, DirecTV (NYSE:DTV) is not down as much with only a 3% drop.  That doesn’t make much sense, although a 13% drop at EchoStar seems exaggerated as well if it is really a potential buyout candidate.  This drop won’t assure that EchoStar gets covered in the Special Situation Investing Newsletter from 24/7 Wall St., but it is definitely worth a more in-depth review on this pullback.

EchoStar’s 52-week trading range is $35.16 to $52.54.

Jon C. Ogg
November 12, 2007

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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