EchoStar stock plunged 13% Tuesday on the news that bondholders of subsidiary Dish Network rejected a proposed debt deal seen as key to sealing a merger with satellite rival DirecTV.
Shares fell to $22.76, their lowest level since early September, on triple their normal trading volume. On September 30, Dish and DirecTV had declared their intention to merge and create the largest U.S. pay-TV provider. While regulators thwarted previous attempts at a combination on anti-competitive grounds, the ravages of cord-cutting have left both players smaller and less dominant, thereby making approval this time arguably more likely.
DirecTV was spun off from DirecTV in 2021 into a private entity 30% owned by private equity firm TPG. In today’s streaming-centric media landscape, both satellite providers are at a competitive disadvantage with cable operators because they do not offer broadband service.
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