DISH - Valens Credit Report - 2020 07 22
Credit markets are grossly overstating credit risk, with a CDS of 450bps and a bond YTW of 5.674% relative to an Intrinsic CDS of 113bps and an Intrinsic YTW of 1.414%. Furthermore, Moody's is overstating DISH's fundamental credit risk, with its Ba3 rating three notches lower than Valens' XO (Baa3) ratingIncentives Dictate Behaviorâ„¢ analysis highlights DISH's compensation framework should drive management to improve all three value drivers, which should lead to Uniform ROA expansion, and greater cash flows available for servicing obligations. Furthermore, management members have no change-in-control compensation, indicating that they are not well-incentivized to accept a buyout or pursue a sale of the company, reducing event risk
Earnings Call Forensicsâ„¢ of the firm's Q1 2020 earnings call (5/7) highlights that management is confident their employees have been working a lot of extra hours to take care of their frontline customers and the DISH community. However, they may lack confidence in their ability to compete and build out a telecommunications network and finalize the Boost deal, and they may be concerned about prepaid business model limitations. Furthermore, they may be concerned about competition from streaming platforms and the sustainability of favorable broadcasting negotiation terms
DISH Network is a holding company. Through its subsidiaries, the company operates two business segments: Pay-TV and Wireless. The company provides pay-TV services under: the DISH? brand, which consists of, among other things, Federal Communications Commission licenses authorizing the company to use direct broadcast satellite and Fixed Satellite Service spectrum, the company's owned and leased satellites, and certain other assets utilized in the company's operations; and the Sling? brand, which consists of, among other things, live-linear streaming over-the-top Internet-based domestic, international and Latino video programming services. In addition, the company invests to acquire certain wireless spectrum licenses and related assets.
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- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
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