Cable One's Q2 Collapse, COO Exit, and Mega Broadband Deal Fight
Q2 earnings miss and subscriber losses Cable One's Q2 revenue fell 8.4% to $348.9M, EPS swung to a $17.60 loss versus an $8.00 profit estimate, and it lost 17,100 residential broadband customers. Adjusted EBITDA dropped to $173.5M from $203.2M. This weakens the profit and growth story that supported its premium valuation, pushing the stock down.
The Q2 miss and subscriber losses are the core fundamental deterioration driving the stock lower.
COO departure adds leadership uncertainty COO Ken Johnson left to become CEO of Bluepeak, sending shares down 8.8%. He oversaw residential and business operations, technology, and digital integration across 24 states. Losing a key executive while the company is struggling with churn and strategy raises doubts about execution, hurting investor confidence.
The COO exit is a new negative event that directly weighed on the stock and adds to management risk.
Financing talks with GTCR and lenders Cable One is in advanced talks with GTCR and private lenders to raise capital and strengthen its balance sheet, and extended the Mega Broadband purchase deadline to October 9. New money could ease debt worries, but no deal is signed, so uncertainty remains and the stock stays volatile.
The financing talks are a potential lifeline but also highlight the company's capital strain, making the impact mixed.
Lender lawsuit threatens Mega Broadband deal CoBank sued to block Cable One's $480M purchase of a 55% Mega Broadband stake, saying the transfer would deepen insolvency. Shares plunged 35%. The legal fight threatens the deal and raises fears about Cable One's financial health, a major negative for the stock.
The lawsuit is the latest and most severe negative event, directly threatening a key transaction and solvency.