Attention, those of you who own DISH Network Corp. (DISH); DISH has completed a merger with Echostar Corporation (SATS). More information on the merger can be found here. The merger includes a trade of 0.35 shares of SATS for every 1 share of DISH previously owned. As a result, some alterations need to be made to your Snider Investment Method worksheets.
On your Individual Stock Purchase Record, you will need to adjust each outstanding purchase you had of DISH prior to the merger. Take the quantity of shares you purchased in each transaction and multiply it by 0.35; for example, if your purchase level was 100, you will take each purchase of 100 shares and multiply it by 0.35, leaving you with 35 shares.
You can then adjust the price paid for each purchase by dividing it by 0.35. For example, if your initial purchase price was $30 for DISH, you will divide that figure by 0.35, leaving you with an adjusted initial purchase price of roughly $85.71 for SATS going forward.
Please note: if you sold DISH in December for tax loss harvesting, you can complete your tax loss by repurchasing shares of SATS. The appropriate number of shares to purchase back will be the amount of shares of DISH you sold multiplied by 0.35. For example, if you sold 1000 shares of DISH in December, you will buy back 350 shares of SATS.
| Original DISH Shares | SATS Repurchase Amount |
| 1000 | 350 |
| 2000 | 700 |
| 3000 | 1050 |
| 4000 | 1400 |
| 5000 | 1750 |
Lattco PRO & Lattco AutoPilot clients: if your DISH position was open when the merger was completed, the adjustments to the SATS position have been made for you and should be reflected in your account by next Trade Day. If you purchase SATS shares later this month or in February to complete a tax loss harvest, please let us know immediately after you do so and we will adjust the position. Your tax loss harvest position for DISH should still be present in the account as of January’s Trade Day, allowing you to complete your January trades in the normal manner.
DISH, and now SATS, is in a frustrating position as it has declined significantly since we initially purchased shares. In most cases, it has been and will remain in winter until the price appreciates. The merger may create additional difficulty in implementing the standard Snider Method. At this time we are not recommending clients sell the shares or take any actions outside the normal Snider Investment Method rules. If you reach a point where the market price of SATS is similar to your last adjusted purchase price, please contact us. We will evaluate the position together to decide if transmogrification is the appropriate course to take.
