Dish Network Shares Slide Following AT&T Pull Out
Investors React To Telco’s Decision To Discontinue Reseller Agreement
By Larry Barrett -- Multichannel News, 7/2/2008 8:12:00 AM MT
Dish Network shares fell $2.20 a share, or 8%, to $26.91 Wednesday, one day after confirming that AT&T would stop reselling its satellite TV services at year’s end when the two companies’ 2003 pact expires.
While AT&T officials said it’s still “evaluating” whether or not it will offer either Dish Network or DirecTV DBS service in 2009 and beyond, Dish Network disclosed in an 8-K filing with the Securities and Exchange Commission that it received a notice of termination from the telco on June 30.
In the first quarter, AT&T announced it would exclusively resell Dish satellite TV services through the end of 2008, including in the nine states served by BellSouth, which had a reseller agreement with DirecTV. AT&T bought BellSouth last year.
DirecTV shares closed off 38 cents, or 1%, to $25.26.
Earlier this month, Dish said in an SEC filing that AT&T notified the company it will exercise put rights for its portion of a $500 million note convertible into Dish shares.
Sanford Bernstein senior analyst Craig Moffett, in a June 17 note to investors, said that AT&T exercising its put rights could be “the final nail in the coffin of merger speculation” regarding AT&T and Dish.
-- MCN’s Todd Spangler contributed to this report.
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