Charter (CHTR) hits an ugly patch

Charter Communications (NASDAQ: CHTR) is the weakest of the big cable companies. It has $19 billion in debt and most operating earnings to cover the interest. While its larger rivals may be able to weather a tough time as the telephone companies begin to take customers with their new "triple play" products, Charter may not make it.

Yesterday, Comcast (NASDAQ: CMCSA), the largest cable company, came out with earnings that showed its growth in digital cable subscribers was not moving up at the rate that it had in earlier reporting periods. With its VoIP offering it was able to steal telecom customers by offering VoIP, broadband, and TV bundled together. But, the telephone companies are putting in fiber systems that are allowing them to match those offerings.

Charter's shares fell from $2.50 to under $2 yesterday on the poor earnings out of Comcast.

Charter's stock price is now down from a 52-week high of almost $5. With its market cap well under $1 billion and a debt load that could crush that company, it is a real question whether the company can stay out of bankruptcy court. It does not have the capital to match the marketing dollars from the large telephone companies and certainly lacks the capital to upgrade its infrastructure to stay in the game.

Douglas A. McIntyre is an editor at 247wallst.com.

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