Dish Stock in Focus as T-Mobile–Sprint Merger Trial Begins

The trial for the state-led lawsuit seeking to stop the T-Mobile (TMUS) and Sprint (S) merger has kicked off. In their opening arguments, the attorneys general of the more than a dozen states opposed to the merger asked the judge in the case to order the companies to drop their proposed union, Reuters reports. Dish Network (DISH) stock will be in focus during the T-Mobile–Sprint merger trial, considering what is at stake for Dish.

T-Mobile–Sprint merger deal still pending 19 months later

T-Mobile and Sprint agreed to merge in April 2018, arguing that doing so would be good for America’s wireless market. For example, they believe the merger will allow them to build a 5G network across the US quickly. Moreover, the companies have argued combining their operations will increase competition in the wireless market, thereby benefiting consumers. But T-Mobile and Sprint have yet to finalize their merger 19 months after agreeing to join, which has weighed on the stocks of all the companies involved.

Dish stock drops amid delay in deal to jumpstart its wireless business

T-Mobile and Sprint brought in Dish as a third party to their merger agreement. They will sell some of their wireless assets, valued at $5.0 billion, to Dish. Therefore, Dish will ensure that America will still have four national wireless operators even after T-Mobile and Sprint combine. The deal should help Dish jumpstart its wireless business, as the assets Dish will get include prepaid brands that have millions of subscribers and already generate revenue.

But the delayed closing of the T-Mobile–Sprint merger has taken a toll on both companies’ stocks as well as Dish stock. For example, Dish stock has dropped 15% since Dish announced it would purchase the T-Mobile–Sprint assets to jumpstart its wireless business. T-Mobile and Sprint stocks have dropped 8.0% and 31%, respectively, in that same timeframe.

States challenging T-Mobile–Sprint merger criticizing Dish co-founder

Dish co-founder and chairman Charlie Ergen will likely be a major topic in the trial of the T-Mobile–Sprint merger deal. The states opposing the T-Mobile–Sprint merger plan to argue that Ergen doesn’t keep his word, The New York Post reports. The states hope to show that Ergen cannot be trusted to preserve wireless competition once T-Mobile and Sprint combine.

Dish stock will likely be volatile during the T-Mobile–Sprint merger trial as investors react to court reports. As Dish’s legacy pay-TV business struggles, investors have pinned hope on the company turning around its wireless venture. Therefore, a court outcome that blocks the T-Mobile–Sprint merger could be a blow to Dish’s wireless plans, sparking a selloff in Dish stock.