Shares of DISH Network (NASDAQ:DISH) fell 10% on Monday after the satellite entertainment provider was on the receiving end of a Wall Street downgrade. The issue? The analyst is worried a potential telecom deal will delay DISH from monetizing on some excess spectrum it had hoped to sell.
DISH appears to be moving based on reports that Sprint and T-Mobile are gaining traction toward winning Federal Communications Commission approval for their proposed megamerger. Analyst Jeffrey Wlodarczak downgraded DISH to a hold from a buy on that progress, saying that the likely approval of a Sprint/T-Mobile deal "significantly pushes back the timing" for a sale of DISH spectrum.
Wlodarczak had previously argued that a Sprint/T-Mobile deal rejection could have left T-Mobile scrambling for spectrum, perhaps causing the company to get into a bidding war with Verizon over DISH spectrum assets.
If T-Mobile is able to gain access to Sprint's spectrum instead, Wlodarczak wrote, Verizon would be under little pressure to race to get a deal done with DISH or to pay up for the assets.
DISH also on Monday said it plans to acquire the broadcast satellite service of EchoStar (NASDAQ:SATS) for $800 million, adding to its spectrum holding. That gives the company more assets to potentially monetize down the road, but it seemingly will not do much to kick-start shares in the near term.
Shares of DISH, even after Monday's decline, are still up 27% year to date. Absent a clear catalyst like a potential spectrum bidding war, it might be difficult for them to climb significantly higher.