Dish Soars on Spectrum Valuation

Stock Up Nearly 11% As AWS Bidding Continues

Dish Network shares were up nearly 11% in Wednesday trading as the federal AWS-3 spectrum auction surpassed expectations, boosting the value of the satellite company’s own wireless licenses considerably.

On Tuesday night, the AWS-3 auction closed with bids topping $16 billion, well ahead of the overall reserve price of the auction of $10.6 billion. Analysts have long said that the size of the AWS bids would set a floor for valuations for Dish’s own wireless spectrum. That perfoirmace continued on Wednesday, with Round 18 of the auction nearing $23 billion.

Dish shares were up 4.5% ($2.95) on Tuesday, Nov. 18 as the auction wound down, closing at $67.85 each. But the stock continued to soar in early trading Wednesday, up as much as10.9% ($7.41) to $75.26 per share. The stock finished the day at  $74.66 each, up $6.81 or 10% per share.

In a note to clients, Elevation LLC media analyst Stephen Sweeney said the boost to Dish shares could last for the rest of the year.

“We continue to think the auction will result is favorable spectrum valuation data points for Dish that should continue to drive the stock higher into year-end,” Sweeney wrote.  “…We continue to recommend a long position in Dish stock with an $82 price target."

The analyst added that he valued Dish’s 2GHz spectrum at $1.50 per MHz POP, its H-Block spectrum at $1 per MHz POP, and its 700 MHz spectrum at $1 per MHz POP for a total spectrum value of $23.5 billion or $50.11 per share in spectrum value.