Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Where Does DISH Network Corp. (DISH) Go From Here?

Last week, I predicted that DISH Network Corp. (NASDAQ:DISH) would take the cake regarding the Clearwire Corporation (NASDAQ:CLWR) buyout battle. Getting a taste of my own “you can’t predict M&A outcomes” medicine, I was wrong, as DISH has backed out of the Clearwire deal, leaving it to telecom heavyweight Sprint Nextel Corporation (NYSE:S). The question now, beyond the validity of my clairvoyance, is where DISH Network Corp. (NASDAQ:DISH) will take its crusade for more spectrum and more infrastructure to launch its much-anticipated broadband network.

DISH Network Corp (NASDAQ:DISH)

Zero for two

Wednesday’s news signals the end (for now) of an epic M&A battle among DISH Network Corp. (NASDAQ:DISH), Clearwire Corporation (NASDAQ:CLWR), Sprint Nextel Corporation (NYSE:S), and SoftBank. For a while, it seemed that DISH had moved swiftly and delicately, disrupting Sprint’s original proposed acquisition of Clearwire, as well as SoftBank’s proposed acquisition of Sprint. Last week, the battle for Sprint swung in favor of SoftBank, and now, Clearwire is likely headed to Sprint.

So what is Charlie Ergen’s DISH to do?

Options

DISH Network Corp. (NASDAQ:DISH)’s acquisition personnel are far from taking a vacation, despite the Clearwire deal falling through. The company, reportedly, has a $2 billion offer for bankrupt wireless company Lightsquared’s most valuable asset: its spectrum. Phil Falcone’s Lightsquared, similar to DISH, had lofty visions of an LTE network, and generated a ton of investor interest early on. But with roadblock after roadblock (and some potential financial mismanagement), the company was unable to put to work its spectrum hoard, and soon filed for bankruptcy.

Though the deal is only in its preliminary stages, and Bloomberg reports the offer is more of a “stalking horse bid,” Lightsquared’s spectrum would be of specific benefit to DISH Network Corp. (NASDAQ:DISH), given that it’s licensed for Mobile Satellite Service (referred to by the FCC as MSS). Currently, DISH is the second-largest holder of not-yet-deployed MSS, behind Lightsquared. The biggest holder of currently licensed and deployed spectrum is Clearwire.

Keeping in mind the beginning of this article, I can’t speculate as to whether DISH will be successful in obtaining Lightsquared’s prize asset. If it does, however, it will, once again, be game on for DISH and its investors.

In the meantime

The DISH play is a difficult one for the retail investor. The company is well managed and, if successful in its network buildout, will be on par with the major telecoms. But that’s a big “if.”

DISH’s biggest direct competitor, DIRECTV (NASDAQ:DTV), is a much more clear-cut investment. The company’s Latin American operations are still flying high (though not as high as originally reported in the first quarter), and even the domestic business is showing growth from premium subscriptions. DIRECTV is also rumored to be the winning suitor for streaming content provider Hulu — giving the satellite company a formidable position in the red-hot space.

If choosing between the two, I prefer DIRECTV (NASDAQ:DTV), based on its transparency going forward. DISH may very well be a lucrative play, but there are many, many hurdles the company must still clear before it can declare a victory.

The article Where Does DISH Go From Here? originally appeared on Fool.com and is written by Michael Lewis.

Fool contributor Michael Lewis has no position in any stocks mentioned. The Motley Fool recommends DirecTV.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.