Dish Network Chairman Charlie Ergen may be considering a merger for the two halves of his telecom empire, Dish and EchoStar, according to a report Thursday by Semafor.

Dish shares fell more than 4% on the report but bounced up more than 2% this morning, trading at $6.97. EchoStar was up 2.6% today, trading at $18.12.

Dish and EchoStar did not respond to Fierce’s requests for comment. Ergen is chairman of both companies.

The Semafor report noted that EchoStar is financially stronger than Dish, which has been spending mightily to build out a nationwide wireless network from scratch – no small feat and one that no one else in recent memory has managed to pull off. Last month, Dish announced that it met the FCC deadline to offer 5G broadband service to 70% of the U.S. population.

If EchoStar and Dish get back together, it would be a reunion of sorts. EchoStar spun off from Dish in 2008 to focus on the broadcast-satellite receiver, antenna and commercial satellite businesses. The remaining business, known as Dish, focused on satellite TV.

Ergen acquired spectrum over the years, which led to a reputation as a spectrum hoarder. In 2018, the company insisted it was serious about building a narrowband IoT network and was set to meet an FCC deadline to cover 70% of the population by March 2020.

But in 2019, the U.S. government decided to set up Dish as a fourth facilities-based carrier to replace Sprint, serving as justification for the T-Mobile/Sprint merger. Dish acquired Sprint’s Boost Mobile prepaid business and used MVNO agreements with T-Mobile and AT&T to offer services while building its 5G network.

Dish has been struggling while building its cloud-native open Radio Access Network (RAN), losing Boost Mobile subscribers while trying to set up a postpaid wireless business through Boost Infinite and get Project Genesis off the ground. Dish shares have lost more than half their value since the start of the year.

‘Ace in the hole’

A popular message from wireless executives commenting publicly on conference calls: Don’t count Charlie Ergen out, even if it appears that Dish is grappling with myriad challenges and is in need of a bunch of capital to finish the 5G network.

“Charlie Ergen always has been able to create value either merging or breaking apart the companies that he has owned,” said Recon Analytics analyst Roger Entner. “EchoStar was always that ace in the hole that Charlie could use to get him out of trouble because there’s so little debt on it and he kept it that way.”

If there were shareholder resistance, “he is not a person to shy away from a fight,” Entner said. “I always thought it was a question of when than if he would tap that piggybank,” known as EchoStar. “It’s right there. He owns it.”

The Semafor article said Dish may need as much as $3 billion more to meet its 2025 deadline to offer service to 75% of the U.S., but Entner said it’s going to need a lot more than that. “Covering 70 percent of the U.S. population is not hard. Covering 75 percent of each PEA is hard,” he said, referring to the Partial Economic Areas and Dish’s 2025 deadline.

Entner said he puts the odds of Ergen merging the two companies as pretty high as he’s done it before and the results turned out in his favor. Even though things look pretty bad right now, “they should never count him out. He’s very good at this game.”

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