So why is DTV's stock price so low comparatively?

[Zenthik]

This has always bugged me. Why does the satellite provider with the largest userbase, best equipment, exclusive sports packages and best customer service rank dead last in the stocks race?

The very blah DISH has almost double the value, despite being very much more user-unfriendly. What exactly is the reason for all this bloat and ballast in E* stock?

 

[gluck75]

GET YOUR FACTS CHECKED ZENTHIK...

Direct TV's market cap is 900 million. Dish's market cap is barely over 100 million. Direct TV, as a public company, is worth 9 times what DISH is.

For future reference you need to calculate shares outstanding * price. Not just "price".

 

[Zenthik]

I have no idea what you mean by "market cap". And you tell me where in the top left corner of the site it says "shares outstanding" or othersuch poppycock.

Besides, what does the average consumer care about more when they invest? Here's a hint: It's the one that's double the DirecTV stock price and posts a $.27 gain as opposed to a $.1 gain. It's not like the average person can buy 900 million shares themselves.

The overflowing amount of posts on the VOOM and DISH boards compared to this one also influenced this post.

 

[gluck75]

Thinking like that will cost you your retirement.Here is a quick lesson:

The value of a public compnay is valued my market Capitalization. Market cap equals the amount of shares the company has been broken into multiplied by the price of each share. So in this example:

Dish has 484,000 shares outstanding. Multiplied by 32 dollars per share...$15,488,000
DTV has 1,384,000 shares outstanding. Multiplied by 17 = $23,945,000

DTV IS CLEARLY WORTH MORE.

One final example. IBM trades near 85 a share, Microsoft near 25. Is IBM worth 60 dollars more per share? NO WAY!!!

 

[Greg Bimson]

Without going into the semantics of how to address market capitalization, both Dish Network and DirecTV have almost doubled. When Dish Network originally made a play for DirecTV, their stock price went to 17. It is now at 31. Therefore, it has risen around 85 percent. DirecTV has went from 9 to 17 in the same period. Also around 85 percent.

Even though DirecTV is somewhere around 17 right now, DirecTV has more shares available than Dish Network. DirecTV as a company is worth more than Dish Network, simply going by the stock price times the amount of stock issued inthe company. That is the market capitalization.

 

[Zenthik]

So how is the overall price relevant to the individual, again? To put it more bluntly, why should I, as an investor, care how much the overall worth of a company is if the stock price itself is many times higher for a competing company, and increases at an incrementally higher rate?

When I only own a very small percentage of the overall available shares, of what relevance are the other several hundred thousand?

 

[gluck75]

Dish

 

[gluck75]

lets say you wanted to invest 100 dollars...you could buy only 3 dish shares, but you could buy about 7 direct tv shares.. Then lets says DISH rises 50 cents per share and direct tv rises 25 cents per share. Do the math...which stock then makes you more money?

 

[ckudrna]

Directv is a much bigger company, they underpreform in terms of individual share performance because of consistantly poor earnings.

Just this last quarter they reported thousands of new subscribers but negative earnings. On top of that, if one of their sats goes dead and needs to be replaced (which was included in the 10-Q report) it is a huge capital investment for them to deal with for years to come. Takes a lot of cash to shoot something into space (i'm told).

Just because they are bigger and have a larger market cap means nothing when looking at share performance. If numbers are bad even with new customers, investors are not happy. Heck, I am not happy.

 

[mike123abc]

Dish has 454 million shares outstanding at $31.64 for 14.364 billion dollars in stock outstanding. But Dish also has 238 million shares of class B stock not traded (owned by Charlie Ergen but convertable at any time to tradeable shares). This adds an additional 7.578 billion or a total value of 21.9 billion. Note that class B has 10 votes per share so Ergen gets 2.38 billion votes to 454m other votes (plus any of the outstanding stock that he might own).

DIRECTV has 1385 million shares outstanding at $16.86 for 23.351 billion dollars in stock outstanding.

So, DIRECTV has a 23.351 to 21.9 billion dollar advantage. Not a huge difference.