At the end of August, Boost Mobile released a new spot TV ad called "The Bear Champ." Within the first few seconds of the ad, the Boost Mobile logo appears alongside what looks like some street art. Blink quickly and you'll miss it. But there is a subtle and important change to the logo. It no longer contains the DISH symbol embedded in it. Instead, it's the logo Boost Mobile had before DISH acquired the brand. And if you look at Boost Mobile's X account, you'll see the logo has been changed there as well. Ditto for the Boost Mobile website.
Reverting the logo back to what it was before DISH acquired the brand seems like a bit of an odd move. However, it may have a significant underlying meaning. DISH may be getting ready to spin off the brand to a blank check company, better known as a Special Purpose Acquisition Corp or SPAC for short. The general purpose of a SPAC is to offer private companies a quick path to the stock market (and cash) by acquiring/merging with them without the need for an IPO. SPACs typically have 18-24 months to find a company to acquire or they must disband and return money to those invested in them.
Last year, Light Reading reported that DISH was in talks to spin off its Boost Mobile retail business to the CONX Corp, a SPAC. At the time, New Street Research stated that Boost being divested to CONX would give Boost the capital it needs to accelerate growth and increase its chances of being successful. The firm also said it should improve the visibility into the margin profile of DISH's underlying network infrastructure business which could in turn advance DISH's access to capital.
CONX Corp had until June 3, 2023, to find and announce a business it would acquire. That date came and went without CONX Corp announcing an acquisition of DISH's wireless retail business or any other business for that matter. However, a filing with the SEC in early August 2023, noted that CONX Corp got an extension from its shareholders at the beginning of June until November 3, 2023, to "consummate a business combination." And what's particularly notable is that the filing also states that "The Company remains in discussions with DISH Network Corp. (“DISH”) regarding a potential transaction (which we refer to as the “Transaction”). The Company expects to announce additional details regarding the potential business combination if and when a definitive agreement is executed."
Interestingly, CONX Corp was founded by Charlie Ergen. Ergen is also the co-founder and chairman of both the DISH Network and EchoStar. In early August, the DISH Network and EchoStar Corporation announced that they had reached an agreement to combine. According to a Reuters article, Jonathan Chaplin of New Street Research said the combination is primarily about getting DISH access to the $1.7 billion in free cash that EchoStar has. Chaplin also said the combination will improve leverage for DISH.
DISH Moves To Help Acquire T-Mobile's 800MHz Spectrum Licenses
A couple of weeks ago DISH filed with the US District Court for the District of Columbia asking for 10 more months to be able to get the financing it needs to purchase T-Mobile's 800MHz spectrum for around 3.6 billion. However, T-Mobile countered by asking the courts to reject the offer stating among other reasons it's not a sure thing that DISH will have the funds to buy the spectrum in 10 months. And that DISH offers no commitment to actually acquire it. T-Mobile argued the additional 10 months will cost it at least $215.7 million to maintain the licenses. As part of its merger approval by regulators with Sprint, T-Mobile is required to sell off its 800MHz spectrum licenses, with DISH being granted until about 3 years after the merger closed to acquire them. The merger closed on April 1, 2020.
Between a DISH/EchoStar merger and a Boost Mobile retail sale, DISH should be able to get the financing it needs to acquire the 800MHz spectrum licenses from T-Mobile. The DISH-EchoStar merger is expected to close by the end of the year. Although CONX and DISH still haven't announced any sort of agreement with each other, the changing of Boost Mobile's logo may be a subtle hint that talks of a Boost Mobile sale are moving forward. And we should know before the end of the year if that's going to happen as well.