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Dish stock downgraded at Pivotal as FCC chair blesses Sprint/T-Mobile deal

Emily Bary

Pivotal Research analyst Jeff Wlodarczak downgraded Dish Networks Inc. shares to hold from buy on Monday, after the Federal Communications Commission chairman came out in favor of Sprint Corp. and T-Mobile US Inc.'s proposed merger. "The likely ultimate approval of the Sprint/T-Mobile deal likely significantly pushes back the timing for a potential Dish spectrum deal materially," Wlodarczak wrote. "Recall we previously argued that a Sprint/T-Mobile deal fail could have potentially driven a Verizon/T-Mobile bidding war for Dish spectrum and while Verizon still absolutely would appear to need Dish spectrum, they appear to be under little pressure to actually enter into a deal in the short/medium term." Wlodarczak also commented on Dish's plan to acquire the Broadcast Satellite Business from EchoStar Corp. for $810 million in stock as of the deal announcement prior to the start of trading. He said that while he doesn't "love" the deal, he sees it as "likely a prudent move" given an expected delay in Dish's ability to monetize its spectrum. Dish shares are off more than 11% in morning trading. They're still up 25% so far this year, as the S&P 500 has risen 13%.