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EchoStar (SATS) Announces Closure of Merger With DISH Network

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EchoStar Corporation (SATS - Free Report) acquired DISH network as a wholly-owned subsidiary on Jan 2, 2024. The merger between the two companies closed on Dec 31, 2023.

The acquisition involved the merger of a wholly-owned subsidiary of EchoStar, led by Charlie Ergen, with DISH Network.

As a result of the merger, each share of DISH Network Class A Common Stock and DISH Network Class C Common Stock converted into 0.350877 shares of EchoStar Class A Common Stock and each share of DISH Network Class B Common Stock converted into 0.350877 shares of EchoStar Class B Common Stock.

DISH Network was known as EchoStar until 2008 when it renamed itself to Dish and spun its satellite Internet business off under the EchoStar name.

DISH Network offers mobile services in the United States, having entered the market in the wake of T-Mobile U.S. and Sprint collaborating in 2020. It also provides TV streaming in its home market. EchoStar sells a range of satellite communications services to customers, including global enterprises and public sector entities.

The headquarters of the combined company is in Englewood, CO, and it operates worldwide under a suite of consumer and business brands, including Boost Mobile, Boost Infinite, Sling TV, DISH TV, EchoStar, Hughes and JUPITER satellite services, HughesON managed services and HughesNet satellite Internet.

Combined Entity to Boost 5G Connectivity

The transaction brings together DISH Network's satellite technology, streaming services and nationwide 5G network with EchoStar's satellite communications solutions.

DISH Network had been struggling with $24.6 billion in short and long-term debt and a steady decrease in customers, with the pay-TV subscriber base declining by 37% over the past 10 years, settling at 8.8 million as of Sep 30, 2023. On Dec 29, 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.

The company has been trimming down its employee base and operations in the months leading up to the merger. It laid off employees and also sold spectrum and approximately 120,000 Boost Mobile prepaid customers in Puerto Rico and the U.S. Virgin Islands to Liberty Latin America for $256 million.

On the upside for the company, the Federal Communications Commission, in 2023, affirmed that DISH Network is meeting its 5G network build-out commitments.

The combined company is well-positioned to provide a broad range of communication and content distribution capabilities.

The unique position of the combined entity is expected to provide a comprehensive global offering that connects consumers to Internet access, mobile phone service, television programming and streaming content. Additionally, the company aims to deliver secure terrestrial, non-terrestrial and hybrid connectivity solutions for business and government customers.

DISH Network's 5G wireless network now covers more than 70% of the U.S. population. The successful launch of EchoStar's JUPITER 3 satellite, with significant available capacity for converged terrestrial and non-terrestrial services, will uniquely position the combined company to deliver a broad set of communication and distribution capabilities.

Zacks Rank and Stocks to Consider

Currently, EchoStar Corporation carries a Zacks Rank #4 (Sell). Shares of SATS have declined 8.9% in the past six months.

Some better-ranked stocks from the broader Zacks Computer and Technology sector are BlackLine (BL - Free Report) , Ceridian HCM and Everbridge (EVBG - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for BlackLine's fourth-quarter 2023 earnings has been revised upward by 4 cents to 54 cents per share in the past 60 days. Shares of BL have declined 7.2% in the past year.

The Zacks Consensus Estimate for Ceridian HCM’s fourth-quarter fiscal 2023 earnings has been revised by a penny northward to 32 cents per share in the past 90 days. Shares of CDAY have gained 4.6% in the past year.

The Zacks Consensus Estimate for Everbridge’s fourth-quarter 2023 earnings has declined by a penny in the past 60 days to 49 cents per share. Shares of EVBG have declined 17.8% in the past year.

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