Last month DISH Network (NASDAQ: DISH) investors pushed the company's share price down 10.5% -- but it had nothing to do with anything DISH did. Instead, the company's rivals -- particularly AT&T (NYSE: T) and Comcast Corporation (NASDAQ: CMCSA) -- reported heavy customer losses in their third quarters and DISH investors were scared that it means bad news for DISH's upcoming quarterly results.
It may seem like DISH's investors were a little too skittish last month, but the underlying problems facing DISH's rivals are entrenched in the pay-TV industry as a whole, and that's bad news for DISH.
A domino affect
DISH investors pushed the company's share price down 5% the day that AT&T reported that it lost about 390,000 total customers in its third quarter, which is a massive loss for the company and a bad sign for the pay-TV industry as a whole.
The company's stock continued fall throughout the month of October when Comcast announced that it expected to lose between 100,000 and 150,000 customers in its third quarter. The company officially announced a loss of125,000 customers at the end of October, causing DISH's stock to dip once again.
Shares of Comcast and AT&T's didn't make it through the month unscathed either. Comcast's shareholders pushed the cable company's stock down more than 6% last month and AT&T's share price tumbled more than 14% in October.
It doesn't take much for cable and satellite company shareholders to get skittish about the pay-TV industry right now, considering that Charter Communications, Comcast, and AT&T have all seen customers flee to cheaper video services services like Netflix and Amazon's Prime video -- and it's about to get worse.
Investors can probably expect more bad news
The latest data from eMarketer shows that by the end of this year more than 22 million Americans will have cancelled their cable or satellite subscriptions. That's about a 30% increase in cancelled subscriptions from 2016. What makes matters worse is that the research firm expects this trend to continue until at least 2021, when the amount of Americans with no cable or satellite TV will reach 30%.
With its rivals losing lots of customers in the third quarter, it's likely that DISH will experience the same. The company didn't provide any forecasts for its upcoming third quarter results, which will be announced later this week, but investors shouldn't get their hopes up.
DISH lost 196,000 pay-TV customers in its second quarter and there's nothing that happened in the third quarter that would serve to stop this bleeding. DISH and the rest of its rivals are in the midst of an upheaval in the pay-TV industry and it's still a big unknown when, or how, the customer losses will stabilize.
10 stocks we like better than DISH NetworkWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and DISH Network wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of November 6, 2017