DISH Network is seemingly having a bad week, yet investors in the company have to be happy with a nearly 10% gain on their shares of DISH Network since last Friday.
Shares of DISH closed on May 9th at $30.59. Today they closed at $33.32, a gain of 9.6% in three trading days. In the interim, DISH Network has added 22 new HD channels, reported lackluster earnings and subscriber growth, and then removed 15 HD channels from the VOOM family. So how do those events add up to a 10% increase in the stock price?
Call it the magic of Wall Street, or more specifically, the magic of the Wall Street analyst. The magic today came from Todd Mitchell, who works for Kaufman Bros. Mr. Mitchell upgraded DISH Network to a “buy” from a “hold,” sending shares up $1.76 today alone, a gain of 5.5%. So why the rosy outlook on DISH Network, and why now?
Apparently Kaufman Bros. decided all of the bad news coming from DISH Network’s earnings report has been overdone. During the call, DISH CEO Charlie Ergen said the company is continuing to expand its HD offerings, and enhancing customer service. This passes for “news” and Wall Street reacts by upgrading the stock?
DISH Network has been talking about this for 6 months now, if not longer. Certainly they are making progress with their HD expansion, but the train left the station last year when DIRECTV started their 100 HD channels by year-end (2007) campaign. DIRECTV once again smashed DISH Network in the net subscription category, a fact that Ergen fessed up to on the call:
“I think we probably missed the HD window last year.”
DISH Network also admitted to numerous other factors impacting their ability to build their customer base. With so many problems yet to work themselves out, an upgrade by Kaufman Bros. at this time is a joke.
2 comments ↓
10% gain in less than a week? How is that even possible given their problems?????
Thats a great leep compared to the current climate of falls
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