Dish Network Corp., a provider of mobile service and satellite TV programming, experienced a significant drop in its stock price after posting disappointing third-quarter earnings and reporting substantial customer losses. The company saw its shares plummet 37% to close at $3.44 in New York on Monday, marking the lowest settlement price since 1998 and the stock’s worst single-day plunge ever.
In the third quarter, Dish reported a loss of 26 cents per share, far below analysts’ expectations of 6 cents. Additionally, the company lost nearly five times as many mobile customers as analysts had predicted. MoffettNathanson LLC described the earnings report as “astonishingly bad” and suggested that it could accelerate Dish’s potential bankruptcy.
Like other pay-TV providers, Dish has struggled with the loss of subscribers as viewers turn to streaming options and reject expensive channel packages. To combat this downward trend, Dish has focused on strengthening its wireless broadband, mobile, and 5G businesses. The company has acquired spectrum from T-Mobile US Inc. and has sold its Boost Mobile and Boost Infinite products through major retailers like Walmart Inc. and Amazon.com Inc.
However, Dish still faces numerous challenges in the wireless market. Bloomberg Intelligence Senior Analyst John Butler noted that the merger with EchoStar Corp. may provide capital, but it will not solve the significant competitive and technical hurdles Dish currently faces. Additionally, the company is burdened with over $20 billion in debt, making it difficult to finance the expansion of its wireless network.
Furthermore, Dish reported a decrease in its retail wireless subscriber base by 225,000, compared to an expected loss of 46,000. The company’s pay-TV business, including both satellite and its Sling brand, lost 64,000 subscribers, exceeding the anticipated loss of 46,000.
Amid these struggles, Dish announced that its CEO Erik Carlson will depart on November 12. Hamid Akhavan, the head of EchoStar, will take over as the president and CEO of the combined company the following day. The merger with EchoStar, valued at about $4 billion, is expected to close by the end of the year.
Dish also faces financial difficulties due to its significant debt and rising borrowing costs. These challenges have hindered the company’s ability to finance its wireless network expansion.
In an attempt to alleviate some of its debt burden, Dish reached an agreement with Liberty Latin America Ltd. to sell its airwaves rights in Puerto Rico and the US Virgin Islands. Additionally, Liberty Latin America will acquire approximately 120,000 prepaid mobile subscribers in those markets.
Overall, Dish Network Corp. is facing an uphill battle as it grapples with disappointing earnings, customer losses, and substantial debt. The company’s future success in the competitive wireless market remains uncertain.