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Pegasus Stock Plunges

Pegasus Communications Corp.’s stock plunged 31% Friday after a clash with DirecTV Inc. dimmed hopes of a merger between the two companies.

Pegasus CEO Marshall Pagon met with DirecTV chairman Chase Carey Thursday to discuss a settlement of litigation between the companies, but it turned into an acquisition discussion.

Pegasus owns franchises to resell DirecTV in most rural markets, and investors have been betting heavily on a sale. But Carey came out of the meeting and surprised Pagon by issuing a caustic statement, saying he’s terminating any mediation.