EchoStar stock soars

News of sub gains ups share price $8

By CHRISTOPHER STERN

WASHINGTON -- EchoStar's stock continued to reach for the sky Wednesday on news that it has signed its 3 millionth customer and an announcement of the second stock split in less than a year.

The Denver-based DBS company saw its stock rise more than $8 during trading Wednesday before settling down at $105.75, an increase of 5.9% from the previous close. The run-up puts EchoStar's total capitalization at $11.36 billion. EchoStar chairman and CEO Charlie Ergen owns approximately 52% of the company, putting his personal stake in EchoStar at over $5.9 billion.

Outstripping expectations

"It's all about subscriber growth," said Goldman Sachs' Lou Kerner. EchoStar has consistently outstripped investors' expectations with its monthly announcement of new subs.

GM Hughes subsidiary DirecTV also registered impressive subscriber growth for September, gaining 160,000 to bring its total sub base to 7.6 million. In addition, DirecTV was able to transition 77,000 customers from its medium-power DBS business to its high-power business. The medium-power subscribers, acquired from PrimeStar, have larger reception dishes and receive signals from a different satellite than the rest of DirecTV's audience.

Beating the percentages

Although EchoStar signed up fewer subs than DirecTV, it claims to be the faster-growing service as it experienced a higher percentage increase: This September, EchoStar signed up 132,000 new customers -- a 63% increase compared to the same period last year. During the last quarter, EchoStar signed up 375,000 new customers, a 65% increase over last year's third quarter.

Also built into the stock's value is the expectation that Congress will soon change copyright laws so that DirecTV and EchoStar may provide a slate of local channels.