Analyst Note| Michael Hodel, CFA |
Altice USA shares have dropped nearly 25% following comments late last week from CEO Dexter Goei that the firm will unexpectedly lose broadband customers during the third quarter. Goei also indicated the firm is rethinking its capital allocation strategy, including share repurchases and fiber network investments. This news comes on the heels of the resignation of Hakim Boubazine, COO of the firm’s core cable business, and the assumption of his responsibilities by Goei. This isn’t the first challenge at Altice--the firm faced execution issues in 2019, as it struggled to bring its wireless offering to market and misjudged the impact of marketing promotions, and it has lagged cable peers throughout the coronavirus pandemic.