(Bloomberg) — Dish Network Corp. suffered its worst stock decline on record after reporting disappointing third-quarter revenue and a drop in wireless customers that was much worse than analysts predicted.
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The satellite TV provider had turned to building a wireless broadband business as its pay-TV offerings falter. But Dish lost nearly five times as many mobile customers as analysts had expected.
The shares fell 31% to $3.79 at 1:53 p.m. in New York, the biggest intraday drop since the stock listed in 1995, and its lowest price since November 1998. Dish is on pace for its worst single-day plunge on record.
Like other pay-TV providers, Dish has bled subscribers as viewers reject expensive channel packages and turn to streaming options. To stem its steady descent, the company has worked to shore up its wireless broadband, mobile and 5G business, acquiring spectrum from T-Mobile US Inc. and selling its Boost Mobile and Boost Infinite products through major retailers like Walmart Inc. and Amazon.com Inc.
In a bid to bolster Dish as a mobile network, co-founder and Chairman Charlie Ergen announced plans in August to merge Dish with EchoStar Corp., the satellite network operator it once owned, in an all-stock deal valued at about $4 billion.
Still, Monday’s results suggest difficulties ahead. In its statement, Dish said third-quarter revenue was $3.7 billion, below analysts’ estimates of $3.8 billion. Loss per share was 26 cents, compared with expected earnings of 6 cents for the provider of mobile service and satellite TV programming.
The company’s results “show challenges to making headway in the wireless market” against heavyweights including AT&T Inc., Verizon Communications Inc. and T-Mobile, Bloomberg Intelligence Senior Analyst John Butler wrote in a note Monday. The merger with EchoStar may provide enough capital to complete Dish’s network, but won’t solve the formidable competitive or technical hurdles it faces, Butler said.
Dish is further burdened by debt exceeding $20 billion and rising borrowing costs that have left it struggling to finance the wireless network.
Retail wireless subscribers decreased by 225,000, compared with an expected loss of 46,000. The drop left Dish with 7.5 million retail wireless subscribers, the company said. Dish’s pay-TV business, both from satellite and its Sling brand, lost 64,000 subscribers. That compared with an expected loss of 46,000.
As part of the merger, Chief Executive Officer Erik Carlson will depart Nov. 12, the company said in its statement Monday. EchoStar head Hamid Akhavan will become president and CEO of the combined company the following day. The personnel changes were disclosed earlier by Ergen in an investors’ call.
The EchoStar transaction is expected to close by year’s end, according to Ergen.
Liberty Latin America Ltd. on Monday said it is to buy Dish airwaves rights in Puerto Rico and the US Virgin Islands — and about 120,000 prepaid mobile subscribers in those markets — in exchange for cash and international roaming credits.
(Updates with shares in first and third paragraphs)
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