The broader stock market may not have had an exciting day on Monday, but there was plenty of action and interest in AT&T (NYSE: T) shares. The telecom company was the subject of hot speculation in the satellite broadcasting world, with investors driving up the stock price by almost 3% on the rumor. This was more than enough to S&P 500 performance of the index, as the indicator closed only marginally higher.
An old merger idea revived?
After hours on Friday, Bloomberg reported that AT&T and its business partner TPG are in talks about merging their DirecTV satellite division with Dish, which is currently owned by EchoSterThe financial news agency added that talks are currently at an early stage, citing anonymous “people familiar with the matter”.
Bloomberg said anonymous spokespeople for both DirecTV and Bloomberg declined to comment. TPG and EchoStar representatives also declined similar requests.
DirecTV and Dish are the two largest satellite TV providers in this country. A merger would create a company with about 20 million customers, according to Bloomberg.
This is not the first time that a merger of the two satellite entities has been mooted. In 2002, the two attempted a merger, but the U.S. Department of Justice rejected it on antitrust grounds.
Nowadays it’s a streaming world
These aren’t glory days for the satellite TV industry, which has been largely overshadowed by streaming video. Subscription plans in the highly competitive streaming space can be very cheap compared to traditional pay TV offerings like satellite; presumably, a marriage between DirecTV and Dish would result in synergies that could drive down costs (and lower subscription rates).
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Why AT&T Stock Was a Market Beater Today was originally published by The Motley Fool
