EchoStar Communications, operator of satellite TV powerhouse DISH Network, as seen strong recent action on the news that AT&T is looking at a possible merger. That's led to some real swings in share price over the past two days popping up from around $39 per share.
The action seems to be subsiding as AT&T is vehemently denying the rumors and EchoStar is staying mum, but I would agree that this deal has a strong chance of getting done in the short term for a couple of reasons.
First DISH and Ma Bell have already been working a strategic alliance with the telephone company offering a packaged deal of their service combined with DISH TV. That means the two companies are already very familiar with each other and their operations.
Also, Verizon has been actively developing and expanding their FiOS service which bundles telephone, television and internet services. That means AT&T has to step up their game if they wish to remain players in this very competitive market place. Consumers have access to an ever expanding menu of bundled services from their cable and telephone companies, so this merger would make perfect sense from AT&T's point of view.
Again, I believe this deal will go through in the next several months, but I do believe share prices will fall off a bit if the speculation is allowed to die down. Because of that, I believe the prudent move is to stand back and wait for a lower entry point, perhaps around $40 - $42, before initiating new positions.
Hold if you already own the shares, but now's not the time to buy.
$43.94 (11/20/07)
