Cable One warns Chapter 11 possible if financing deal collapses

Cable One told investors Thursday it may have to file for Chapter 11 bankruptcy protection if it cannot close a pending $1.3 billion financing deal and manage near-term debt maturities. The disclosure, made in a 10-Q filing alongside Q3 results, sent shares down $1.02, or 19.6%, to $4.14 in Friday morning trading.

The warning puts the regional US cable operator's troubles in plain language for the first time. "If we are unable to consummate a financing transaction and address near-term debt maturities on acceptable terms or at all, or if a default occurs under our debt instruments that we are unable to timely cure, it may become necessary for us to seek relief under Chapter 11 of the US Bankruptcy Code," Cable One said in the filing.

Why is the Mega Broadband deal stuck?

The immediate pressure point is Cable One's proposed acquisition of the 55% of Mega Broadband Inc. (MBI) it does not already own. That transaction has been frozen since CoBank, one of the company's lenders, convinced a court to delay the deal with a temporary restraining order. CoBank argued Cable One is on the brink of bankruptcy and might fail to repay its debts if the MBI deal proceeds. Cable One has asked the court to dissolve the TRO; there is no timeline for a ruling.

Cable One says each additional delay threatens the $1.3 billion loan it intends to use to repay debt tied to the MBI deal and to fund what it calls the runway to "execute on its business priorities." CFO Todd Koetje offered little else on the earnings call: "With respect to MBI, we continue to evaluate the appropriate next steps and do not have any additional updates to announce today."

The warning follows the company's recent establishment of a special committee to evaluate strategic alternatives. MoffettNathanson analyst Craig Moffett wrote in a research note that a sale — once the "most desirable alternative" — has grown unlikely. "The most likely strategic acquirer — Charter — has been engaged with its much larger merger with Cox, taking it out of the running," he noted. Even so, he argued private equity investors underwriting costly fiber builds in low-density markets "would be well advised to acquire Cable One's assets at a fraction of the cost to build."

What does the balance sheet look like?

If the MBI transaction is terminated, the company faces roughly $1 billion of MBI maturities by this time next year, plus another roughly $2 billion of maturities in the early part of 2028, according to Moffett. Restructuring the balance sheet, not M&A, is the near-term priority.

The operational picture is weak but stabilizing. Q3 revenue came in at $332.2 million, down 11.7% year over year. Broadband ARPU fell 2.6% sequentially and 4.5% annually to $78.48, still trailing US cable peers.

Subscriber trends improved after recent price cuts. Cable One lost 7,300 broadband subscribers in Q3 — better than the 21,300 lost a year ago and the 14,400 decline analysts expected. Video losses narrowed to 6,200 from 7,400, though the rate of decline worsened slightly, to 24.8% from 24.1% in the prior quarter, per Moffett.

CEO James Holanda, who took the helm earlier this year, pointed to momentum on the call: "We delivered our strongest quarterly connect performance in 12 quarters and our best net adds in seven quarters." He called retention a "priority," citing free speed upgrades and new AI tools that help employees keep customers from leaving.

One number the company did not provide: mobile line counts. Cable One launched mobile service in December 2025 and recently began selling lines to small business customers, but it reported no sales figures through the end of Q3 — a silence worth noting given mobile is often pitched as cable's growth engine.

With a court date unresolved, a $1.3 billion loan hanging in the balance and a special committee still deliberating, Cable One's next filing deadline may matter as much as its next earnings call.