Share prices for Dish Network parent EchoStar have taken a dive in the days since the company published its second quarterly earnings report, revealing about $2 billion in debt due over the next three months.
Currently, stock for the media giant is trading at $16.23, with overall share price down more than 14% in the past five days.
Before EchoStar reported its earnings Friday, shares for the company were up as high as $20.
Also Read: Dish and Sling TV Revenue Collapses, Down a Record 10% in Q2
That disparity inspired investment banking giant JP Morgan to drop EchoStar’s investment outlook Monday from neutral to underweight.
EchoStar, which closed Q2 with $521 million in cash and cash equivalents, confirmed in its financial results that it does not have the cash to pay off its debts.
However, the company is in discussion with outside parties to compensate for its cash shortage, and is working to refinance its debt obligations.
Also Read: EchoStar Posts Q2 Loss as It Sheds 104,000 Pay TV Subscribers
“We continue to make progress and are in constructive discussions with counterparties, which we feel best support our objective,” Dish CEO Hamid Akhavan told investors on Friday. “The complex and delicate nature of this process demands time and confidentiality. We will certainly have more to share in due course.”
Akhavan emphasized the use of EchoStar’s spectrum assets, many of which it gained after acquiring Dish Network at the beginning of this year, as a possible point of sale to recover some financial runway.
According to Akhavan, the only reason the company hasn’t used its spectrum assets as collateral is because it has yet to secure a desirable deal.
Veteran analyst Craig Moffett has a less optimistic outlook — according to a report published by MoffettNathanson, he believes that auction dynamics for the company’s spectrum holdings are “unfavorable for a host of reasons.”
Even more, Moffet believes that EchoStar’s shares are “likely to be worthless,” and predicts that the company may see bankruptcy by the end of the year.
