In business, the word ALPHA describes the active return on an investment, gauges the performance of an investment against a market index used as a benchmark, since they are often considered to represent the market's movement as a whole. The following information is from seekingalpha.com. The link to this article is provided below if you wish to read it in its entirety.
1) Altice’s takeover of Cablevision will provide opportunities for Verizon’s FiOS to capture customers in the areas within Greater New York where they are the two broadband operators.
2) Altice’s characteristic treatment of and actions with respect to its employees and contractors will inevitably result in deterioration in the quality of Cablevision’s services and customer care.
3) Sooner or later Altice’s business model based on swinging cost cuts and heavy debt loads will implode, presenting opportunities for short sellers who get the timing right.
4) Major financial institutions have garnered substantial fees from Altice’s series of acquisitions, so their support for Altice should not be assigned any significant probative value.
Altice has a well-documented record outside the US of substantial cost cutting and its consequences…. But they are otherwise harmful to the interests of employees, customers, contractors and the competitiveness of the operators themselves.
Altice's cost reductions are so deep that they are achieved at the expense of deterioration in services, disaffection among employees, and declines in customer bases…. Evidence of these practices and their consequences was presented to regulators in the US (the FCC and the New York PSC in particular) but in the end they chose to ignore it or downplay its significance.
Altice has been very ingenious in finding ways around the spirit if not the letter of commitments it has made abroad about employment, the quality of the services of its acquired properties will deliver and its adherence to policies that promote the public interest. One individual - Patrick Drahi - is the sole and unchallengeable decider within Altice and his position is unassailable within its corporate structure. Some of the same (his) key lieutenants that implemented Altice's anti-employee, anti-customer, anti-contractor tactics abroad under his instructions are in charge of Altice USA.
Sooner or later comparable tactics will become visible within Cablevision, as they have become increasingly apparent within Altice's major European property SFR, the second wireless operator and leading cable operator in France.
Arguably Altice may even feel it will be able to operate with less regard for customers in the US than for SFR's customers since the US broadband market is less competitive than in France. In general French consumers have more choices of alternative fixed broadband providers than their US counterparts, so the latter are less able to switch if they become dissatisfied with their current provider. Nevertheless, when the experiences of Cablevision or Optimum customers deteriorate as a result of Altice's initiatives, Verizon should be able to persuade them to switch to its FiOS service in the areas where FiOS overlaps with Cablevision.
In its arguments in favor of the Cablevision deal, Altice referred on several occasions to the financing it had obtained from large, sophisticated investors and financial institutions such as JPMorgan as evidence of the confidence of the "market" in its business model….. Altice's financial backers have benefited from substantial transaction fees generated by the series of Altice's acquisitions over the past few years. Why would they want to highlight any risks or weaknesses or undesirable consequences flowing from Altice's business model that might bring this flow of revenues to an end?
However at some point Altice's business model will implode. Altice's excessively aggressive pursuit of deep cost cuts leads to a meaner and not a leaner or more efficient and innovative organization. It increases cash flow to pay down debt in the shorter term but results in a loss of competitiveness and hence a declining customer base and falling revenues as well as demotivated employees and contractors who feel they have been cheated. This model is not ultimately sustainable.
http://seekingalpha.com/article/3994146-altices-business-model-will-implode-sooner-later