Cable and CHTR

[craigthedeac]

Anyone have any comments on the recent Q2 reports or why CHTR has been tanking lately?

[icetonez]

I don't really know much, but I imagine in this broad downturn the higher leveraged companies are more volatile? I think they missed analyst estimates pretty badly.

These last few weeks have been a brutal way to start my active portfolio career. I deserve it though for trying to trail SM and DC lol. Down 27% with nick, dfc, usg, chtr, and dsup. No idea what I'm doing. Coincedentally saw an old Seinfeld episode yesterday where George and Jerry take a stock tip. Like George, I'm going down with these ships!

[craigthedeac]

lots of news today with talks of CHTR going private and it had a big spike this afternoon (and then went back down)

[icetonez]

Taking Charter (CHTR) Private

Billionaire Paul Allen disclosed that he was looking that the possibility of taking Charter Communications (CHTR) private or "a recapitalization or restructuring designed to reduce Charter's leverage", according to The Wall Street Journal.

Dream on. Charter has $19.6 billion in debt, which is not ideal in any environment. In the current market it is deadly. Even with all of Allen's money, it is hard to see how he could buy-out current public shareholders and support the debt.

Charter's stock jumped up briefly on the news, but still traded as low as $2.45, close to it 52-week low. Charter would have to appoint independent directors to review any deal, as happened at Cablevision (CVC) when the founding Dolan family offered to buy-out its public shareholders. Charter traded near $5 in mid-July, so it may be hard to convince directors to take much less than that.

At $4.50 a share, the cost of buying in all of the public float would be close to $2 billion. The company simply could not support that amount plus the current debt load.

Allen could also try to sell the company's assets to another firm, perhaps Comcast (CMCSA). But, with the debt that would have to be assumed, the price would be at least $25 billion. The company's operating income run rate is about $750 million. So a sticker that high is not going to attract a buyer.

Charter is going to have to dig itself out the old fashion way. Costs and capex are going to have to stay low which is hard when it needs to compete with large telecom companies coming to market with fiber-to-the-home broadband and TV services.

Charter is a company with no good options.

Douglas A. McIntyre

http://www.247wallst.com/2007/08/taking-charter-.html

[icetonez]

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Isn't Verizon taking a huge share in the markets it's entered?

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I read in a Business Week article today where Roberts from Comcast said that a technology exists so that speeds of upto 150 mbps can be reached with their current cable infrasctucture; no more digging needed. That should help preseve market share when if ever users will need that high of a speed.

[craigthedeac]

bump, Q3 came out and it's down to 1.18 at the moment

[gonebroke2]

[ QUOTE ]
bump, Q3 came out and it's down to 1.18 at the moment

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you guys are better off listening to SHOE. this guy has picked nothing but lemons.

[ahnuld]

this thing looks like its headed to bankrutpcy to me. How and when do they plan on making money? That debt is such a huge burden and now they are losing suscribers? I have a hard time seeing new customers wanting to sign up to a sinking company like this.