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Posted
Jun 18 2008, 09:47 AM
by
Kim Peterson
A big setback for DISH Network has sent shares down 7% today. And while some analysts caution not to read too much into it, I say that DISH has plenty to be worried about. AT&T is forcing DISH to pay back $500 million in debt that was supposed to be due in July of 2010. DISH says it has the money to do so, and won't have to take out a loan. AT&T played down the move, telling the Wall Street Journal that the money "could be put to better use." But this is also a clear message that AT&T has no interest in acquiring DISH. AT&T shares fell less than 1% today.
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Posted
Apr 03 2008, 11:45 AM
by
Douglas McIntyre
Filed under: Apple, Comcast, Ford, DirecTV, Verizon, Sirius, XM Satellite Radio, AT&T, Time Warner Cable, Toyota, GM, Clear Channel, Dish Network
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When the Justice Department cleared the merger of Sirius with XM Satellite there was anticipation that once the deal got done the shares of both companies would go up. A year ago, the combination was viewed as a dream deal.
If anything, the shares have dropped. Sirius is below $3 and XM is below $13. The market began to realize that the year wasted on getting government approval was a year the companies need to stay competitive. XM has over $1 billion in debt. Refinancing it in the current market would be nearly impossible. Selling shares would lead to extremely large dilution. As we recently noted, Goldman Sachs even put Sirius on its "Conviction Sell List" with a price target of $2.25.
Growth at Sirius has slowed considerably. In the fourth quarter revenue rose only 29% to $250 million. But, for the full year, revenue was up 45%. Subscriber deactivations in the fourth quarter were almost 540,000 compared to 330,000 in the same quarter of 2006. The firm's net loss was $166 million. Long-term debt was almost $1.3 billion.
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Posted
Mar 13 2008, 12:18 PM
by
Kim Peterson
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DirecTV is finally going to offer a video-on-demand service. About time, too. Comcast and other companies are light-years ahead in this area, and on-demand is becoming a required feature for some consumers these days. It's taken DirecTV this long because, as a satellite provider, it broadcasts a one-way signal. The technology doesn't allow for the two-way conversation that an interactive service like on-demand uses. DirecTV is going to work around this using broadband connections and digital video recorder (DVR) technology, according to the WSJ. DirecTV shares are up nearly 1% on the news today to $25.21. The project is expected to launch in the second quarter.
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Posted
Feb 15 2008, 01:08 AM
by
Kim Peterson
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You'd think that in a slowing economy, companies would be trying to hold on to every potential customer. Not DirecTV. The satellite operator is weeding out customers, and it has no problem with fewer people signing up.
In a conference call with analysts this week, CEO Chase Carey said the company has a new focus on "quality subscribers" (read: ones with money). It finds these subscribers by analyzing their income, age, home ownership, education and other metrics, Carey said in an earnings call with analysts. (Transcript here). DirecTV puts those customers into different categories to figure out who's valuable and who's not, and it's going after the valuable ones.
"We developed in the last couple of years a much more sophisticated customer segmentation set of tools that are unique to us," he said.
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Posted
Nov 12 2007, 12:18 PM
by
Kim Peterson
Little by little, we're starting to see how tech companies are getting hit by the sub-prime mortgage crisis. The latest victim is EchoStar, who said in an SEC filing that it's not getting as many new subscribers to its DISH Network. The company is blaming the "deteriorating housing market and increased mortgage defaults," among several reasons. EchoStar shares are getting hammered today, falling nearly 14%.
The numbers are pretty bad. Net new subscribers for the third quarter plummeted 63% from last year to 295,000. Subscriber churn rose to 1.94% from 1.76%. EchoStar again blamed "adverse economic conditions" as one of the factors.
That churn was churning Todd Mitchell's stomach. The Kaufman Brothers analyst called it a "red flag that slower growth was due to more than just a pullback in spending."
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