Tag Archives: Altice USA

Is Optimum Imploding?

I noticed an article that said that Optimum (Altice USA) was in danger of being delisted from the New York Stock Exchange. NYSE automatically issues a warning to any stock when the average share price over thirty days is below $1.00. This warning was given to Optimum on August 13, and the company has until February 13, 2027, to get the 30-day average stock price above $1.00 to remain listed on the exchange.

The company’s stock has  plummeted over the last year. A year ago, the stock was trading at $2.33 per share. Five years ago, the stock traded at more than $28 per share. As I wrote this blog, the share price was $0.89. The lowest price this year was $0.60 per share. Optimum stock is considered extremely volatile by analysts because the company had almost 50 days during the last year when the stock rose or fell by more than 5%. The changes aren’t always downward. In early June, the stock price rose more than 9% in one day on news that the company had grown to have 700,000 cellular customers.

On the surface, the stock price seems out of line for an ISP that had over four million customers at the end of the second quarter of this year. At the end of the second quarter of this year, the company had over four million broadband customers, but had lost 40,000 customers in the second quarter. The company is profitable. Second quarter EBITDA was $785.7 million, which was 2.2% lower than the previous quarter due to the customer losses. However, the company has trimmed operating expenses and capital expenditures to maximize cash flow. Unfortunately, those earnings are not enough for the company to get out of its current problems.

Optimum’s biggest problem is its debt load of $25.3 billion, with a debt payment of more than $6 billion coming due in 2027. The company is being prohibited from restructuring the debt due to a group of current Optimum lenders that have banded together and have an agreement among them that will not allow the company to restructure debt without supermajority approval from lenders. Optimum claims this is illegal price fixing and sued major investors including Ares Management, Apollo Global Management, and BlackRock. The suit, filed in New York federal court, accuses the companies of antitrust violations by creating an illegal cartel through the cooperative credit agreement.

The Dutch investment firm Next Alt S.à r.l, which is owned by billionaire Patrick Drahi, owns a majority interest in the company, with the remaining shares publicly traded. In June, Drahi tried to shake the bondholders loose from the consortium action by telling them that the company faced a $4 billion tax liability if it went to bankruptcy, a move that would greatly reduce any value to the bondholders in a bankruptcy process.

If the company is forced into bankruptcy, there is a growing circle of possible buyers for the company. At the end of the second quarter, the company had 3.1 million fiber passings out of 10.1 million total passings. The company has also convinced 9% of customers to bundle broadband with cellular service – the new convergence goal for ISPs.

But Patrick Drahi has been successful in the past in working his companies out of tight spots. But this seems like a situation that he probably can’t easily resolve.

Foreign Ownership of ISPs

I saw a recent announcement that the FCC’s Wireless Competition Bureau had approved the transfer of WideOpenWest to Japan’s Softbank Group. WideOpenWest is the eighth-largest cable company, which operates under the brand name of WOW! The proposed transaction has Softbank buying the DigitalBridge Group, which is WOW!’s majority owner. This deal was announced at the end of 2025, just a few days before DigitalBridge and Crestview Partners took WOW! private.

The blog raises the question about foreign ownership of ISPs because the current administration has put a huge amount of emphasis on America First, which emphasizes, among other things, domestic ownership of corporations doing business in the country. There has been a statutory limit on foreign ownership in U.S. corporations that hold common carrier status or hold broadcast licenses that was created by the Telecommunications Act of 1934. However, the FCC has the ability to waive the 25% limit if it thinks the foreign ownership is in the public interest.

What prompted my question was that the FCC just announced a ban on foreign-made advanced robotic devices. This ban covers all mechanical devices, including autonomous mobile robots, humanoid robots, and quadrupeds that are capable of locomotion, obstacle avoidance, navigation, or movement that operate at a distance from a human operator.

The FCC ban was done by adding foreign-made robots to the Covered List, which is a list the FCC maintains of electronics and devices that are banned from the U.S. At the same time the FCC banned robots, they also banned foreign-made power inverters. At least for now, this ban would even stop the sale of Roombas and other automated vacuums. The FCC knew this ban would be controversial and published a lengthy FAQ about the robot and power-inverter bans. You may recall that the FCC added WiFi modems to the covered list recently.

Assuming that the WOW! transaction will be completed, they won’t be the only foreign-owned ISP in the country. The biggest is T-Mobile, with a majority ownership by the German firm Deutsche Telekom. I wrote a blog recently talking about how Deutsche Telekom is trying to merge with T-Mobile to increase the ability of T-Mobile to expand and grow much larger. It seems likely that if Deutsche Telekom can pull off this merger, the combined company would pursue the acquisition of other large U.S. ISPs. Timotheus Höttges, the CEO of Deutsche Telekom, thinks T-Mobile should be competing on an equal footing with AT&T and Verizon.

Another foreign-owned ISP is Altice USA, which is owned by the French-Israeli billionaire Patrick Drahi, who holds the 74% of shares of stock and 98% of the voting rights of the company. Altice operates under the brand name Optimum and has almost 5 million customers in 21 states. I’ve written several blogs about Altice, which is currently facing a major debt crisis. The company has $21.8 billion in debt, with a payment of $6.2 billion due in 2027. Altice has sued two of its major creditors of the company, Blackrock and Apollo Asset Management, claiming they are blocking the company from refinancing the debt.

Another foreign-owned ISP is Zipley, which is owned by BCE Inc (Bell Canada Enterprises). BCE acquired Zipley for $5 billion in 2025 after receiving a foreign ownership waiver from the FCC.

I don’t have a strong opinion about foreign ownership of ISPs. But I do find it curious that most of the other bans, like robots and WiFi modems, are being done for national security reasons. I can’t think of many industries that we care about more than those that operate and control access to the Internet, and I find it curious that the FCC continues to make exceptions to the 25% foreign ownership cap without much public debate.