Although Dish's net income continues to be very strong as a percentage of revenue, revenue growth has ground to a standstill over the last year, and that seems to be the impetus for Ergen to try SOMETHING. (like trying to buy CLWR)
I guess Ergen and the BOD likely already made the calculation not to try to buy Sprint, but Ergen has generated enough clout to get the BOD to at least try for Clearwire, probably in the hopes of negotiating some type of concession for Clearwire spectrum.
Here is why I don't see Dish trying to buy Sprint:
1) Ergen and the BOD had ample time to discuss it and clear Softbank off the table, but attempting a hostyle buy for Sprint was deemed too risky due to the sheer size required for such a deal.
2) Stock offering (for financing or stock swap) might not be in the cards: Dish's stock price has performed well over the last year, but year-to-date it is only a few percent higher. That should probably make the BOD worried about the effects of an offering or increased float on the stock price.
3) Buying with debt option (for financing) is closing very fast: interest rates are beginning to tighten again, and the window for corporate debt purchases at ridiculously low rates might close as early as next week.
I have read a few threads here, on the S board, and on the CLWR board. Those are my thoughts. Anything horribly wrong with my picture?
DISH cannot buy Sprint because the end result does not make sense. However, DISH has abilities and assets that can build into either a mass hemorrhoid in the plans of the mobile operators or be a willing ally that participates. This is Ergen's ploy: to become a strong enough threat through financial maneuvering in anticipation of new market developments that they finally, after a few years of trying, find their place amongst mobile-BB and TV enterprise.
The result of the maneuvering is largely in the hands of Sprint-Softbank to see a way out of the current standoff as collaboration that meets DISH's new deal compromises. The odds on bet is, imo, that DISH will come away with a way forward that provides growth and its not captive of the mobile operators. That is the best DISH can go for imo. Its not as simple or as captive as satellite operation, but it should work to DISH's benefit... if SB-S buy into it.
I know we have had some indirect comments on this, but what if DISH has only been interested in CLEAR all along and is using the Sprint offer only as a way to level the playing field...SB we know is really after the combination of S & CLEAR, so Son has to spread his resources, DISH can in effect focus its resources on DISH and walk from Sprint. If you make an assumption that DISH pulls off a misdirection play, gets CLEAR, will Son still move forward on SPRINT? May we will see Son intentionally delaying Sprints vote until after the Clear deal is consummated for him. That however may take a price on a per share basis over the Sprint per share price and then Son has a problem getting approval from shareholders for Sprint at the current price per share, causing him to spend much more than planed on the bigger purchase? Thoughts?
Charlie Ergen fancies himself as a poker player, but he does not have a great hand. He's good at agitating whoever he feels limit his personal ambition. That seems to be his personal trait. Deep down, Charlie probably already knows he is not getting Sprint Nextel and he is not getting Clear Wire. He should also know leveraging his company with substantial debt could destroy his company and the very lives of many of his employees. His goal is to have access to Sprint network. Just MHO. Do your own DD.
Ergen is a master poker player. Hesse and Son should not even be at the table as they are looking incredibly foolish. Softbank has already invested money in Sprint. Dish has yet to invest in either Clear wire or Sprint yet Ergen is forcing them to show themselves as the fools that they are. They have further inflamed the minority shareholders of Clearwire with their antics. There is pending court action too. The Softbank plans have a great chance of getting derailed. Ergen will win in my opinion. So will Clearwire minority shareholders. Stay tuned it is a real life soap opera with many more episodes to come.