Dish Network (DISH) shares have dipped after research firm Macquarie downgraded the stock to Neutral, arguing that the company’s $6.2B splurge on the recent wireless spectrum auction could deter a potential suitor and appears misaligned with the coming rollout of 5G technology.

DISH DOWNGRADE: Downgrading Dish to Neutral while cutting her target price to $61 after the recent spectrum auction, Macquarie’s Amy Yong argues that the company’s $6.2B spending spree – the second largest of the auction and far ahead of the next highest buyer – is a “thesis changer” that negatively impacts M&A optionality. Too much spectrum could in fact make Dish “harder to swallow” for a potential acquirer, the analyst explains, while the now “balanced” spectrum across the major carriers, including T-Mobile’s (TMUS) nearly $8B auction spend, AT&T’s (T) $910M buy as well as its recent deals outside the auction, and Sprint’s (S) strong existing portfolio, reduce the near-term desirability of Dish’s asset package.

Yong warns that even in the event of an acquisition, potential upside “could be capped” because of the above-mentioned spectrum balance as well as likely enhanced regulatory scrutiny, and buildout requirements which won’t enter the picture until 2020. Also driving the downgrade is Yong’s belief that Dish subscriber numbers “could feel continued pressure” from secular TV trends even as over-the-top competition increases, and the fact that 5G wireless technology appears to hinge on millimeter wave and fiber, as evidenced by Verizon (VZ) and AT&T’s weak participation in the auction and recent deals for Straight Path (STRP), FiberTower, and XO Communications.

WHAT’S NOTABLE: AT&T announced January 31 an agreement to acquire FiberTower and its millimeter wave rights to “assist in the execution” of its 5G rollout. On April 10, AT&T announced a $1.6B deal for Straight Path Communications. The company, a significant holder of millimeter wave spectrum, disclosed that same week that an unnamed third party – later named by Reuters as Verizon – was considering beating that bid. Big Red, meanwhile, announced today a $1.05B fiber optic cable purchase agreement with Corning (GLW).