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Dish (DISH -1.4%) owned $592M in "derivative financial instruments" tied to Sprint's (S) stock...

Dish (DISH -1.4%) owned $592M in "derivative financial instruments" tied to Sprint's (S) stock as of May 1, as well as Sprint shares worth $75M as of March 31, the company discloses in a 10-Q filed after its Q1 report. Dish also owned $950M in Clearwire (CLWR) debt at the end of Q1, nearly unchanged from $951M at the end of Q4. Consider the Sprint purchases an attempt to gain a bit of leverage as Dish pursues its bids for Sprint and Clearwire. Also: During Dish's Q1 call, Charlie Ergen stated Dish would consider partnering with another carrier if Sprint sticks with SoftBank (no surprise), and that a sale of the company wouldn't be out of the question. (previous)
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Comments (7)
  • DWFreidell
    , contributor
    Comments (41) | Send Message
     
    Ergen is one of the most difficult CEO's to work with anywhere, as well his employee satisfaction and morale levels are reputed to be one of the lowest among major companies. He may be his worst impediment to making a deal for Sprint.
    9 May 2013, 01:40 PM Reply Like
  • Hydro9268
    , contributor
    Comments (20) | Send Message
     
    The plot thickens!
    9 May 2013, 02:23 PM Reply Like
  • Kwis Wee
    , contributor
    Comments (6) | Send Message
     
    So, um, if I don't get picked first, I'm taking my ball and going home?
    9 May 2013, 08:17 PM Reply Like
  • biffster7199
    , contributor
    Comments (193) | Send Message
     
    i.e. equity options (calls) in all likelihood on (S) . A very savvy way to established a leveraged a position in the stock at minimal cost. Not bad for "an amateur" IMHO.
    10 May 2013, 09:16 PM Reply Like
  • biffster7199
    , contributor
    Comments (193) | Send Message
     
    Furthermore the debt position in CLWR assures DISH a place at the table in the event, however unlikely, of a CLWR default on its interest payment June 1.
    10 May 2013, 09:16 PM Reply Like
  • brooooo
    , contributor
    Comments (33) | Send Message
     
    Buying debt is one thing, but buying derivatives to bet on the direction of the company while bidding the company, is it even legal? Otherwise, if I was a rich guy, I could make tons of money by making frivolous M&A proposals and walk away with tons of money without the any true intention of doing a deal.
    11 May 2013, 01:15 PM Reply Like
  • biffster7199
    , contributor
    Comments (193) | Send Message
     
    I'm not a lawyer I 've never passed a bar as the old line goes) but yeah It's legal think of it this way ... eveyrtime some "legendary" investor or major brokerage firm announces positions they HAVE taken or sentiments on a market (think GLODMAN SACHS with gold for example or Bill Gross with bonds ) in which they have positioned themselves accordingly they are doing the same thing - self front running.
    13 May 2013, 12:47 PM Reply Like
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