What will Charlie Ergen and Dish Network (NASDAQ: DISH) do with all of that spectrum?
As Dish's competitors attempt to consolidate all around it, that is the essential question posed in a Monday Barron's report, which casts Dish's chairman as a patient, wily poker player, biding his time as his rivals frantically over-play their hands.
To be certain, this is not a story about a forlorn pay TV provider with 15 million U.S. video subscriptions and a bunch of undeveloped wireless spectrum, lamenting its own missed merger opportunities amid an uncertain future. This is a much more rosy, somewhat alternative viewpoint.
In fact, Barron's talked to one stock analyst who is absolutely bullish on the Colorado-based pay TV operator. As the Federal Communications Commission readies its largest spectrum auction since 2008, scheduled to start in November, Citigroup's Jason Bazinet says Wall Street has no idea if Dish plans to sell its nationwide package of wireless licenses. The fact that it could should drive up Dish's stock price as much as 20 percent to a target of around $79 a share, Bazinet argues.
"The thesis is that the auction itself will be a positive catalyst for the stock," he told Barron's.
Dish controls more than 50 MHz of spectrum, including 40 MHz in the AWS-4 band and 10 MHz of the 1900 MHz PCS H Block, part of which is adjacent to AWS-4. Speaking recently in the context of the billions of dollars Dish has spent to acquire spectrum, Ergen said recently that "we're ready to harvest our investments."
The Barron's article, which paints a flattering portrait of the often polarizing Ergen, also quotes high-profile Wells Fargo analyst Marci Ryvicker, who says she subscribes to the belief that the Dish chairman is "rational and brilliant" as opposed to "irrational and stubborn."
To hammer home its point, Barron's recalled an Ergen quote from a recent earnings call: "When I used to play poker, and everybody was throwing chips and betting crazy on the table, and I had really good cards, I always felt it was better just to sit back and watch them go at it. And every time they went at it, I'd learn something. As I sat back, they didn't learn anything about what I had. And I learned to trust my cards."
- read this Barron's story
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