Cable One Shares Plunge 22% to All-Time Low as CoBank TRO Threatens Mega Broadband Deal
CABO is trading near its 52-week low of $8.9 (1.3% above the low).
Summary
Cable One shares fell more than 22% to an all-time low after the company disclosed it filed an order late Tuesday asking the Southern District of New York to rescind the temporary restraining order blocking its $480M purchase of the remaining 55% of Mega Broadband. CoBank, which holds about $1.1B in secured loans, obtained the TRO alleging the purchase price would constitute a constructive fraudulent transfer. Cable One says it will vigorously dispute the claims. The dispute centers on financing: Cable One structured a deal with GTCR and private lenders to fund the acquisition and pay down part of its $2.45B debt, but CoBank offered alternative terms that would subordinate some existing lenders. This follows the October 9 TRO and the October 13 request to lift it, but today's 22% drop and the new rescission filing mark a significant escalation. The company's Q2 net loss of $1.16B and collapsed equity to $326M leave little room for error.
At the time of this announcement, CABO was trading at $9.02 on NYSE in the Trade & Services sector, with a market capitalization of approximately $51.2M. The 52-week trading range was $8.90 to $168.55. This news item was assessed with negative market sentiment and an importance score of 8 out of 10. Source: Seeking Alpha.