MediaFile

Charter: The start of the end, or a new start?

March 27, 2009

Paul Allen’s Charter Communications has officially filed for bankruptcy, citing $24.2 billion in debt and $13.1 billion in assets.

The move has been expected for months. Still, it makes you wonder: Is this a good or bad thing for the company? For the industry?

That depends on who you are. As far as the company is concerned, the action gets its a $3 billion injection from investors.

It will reorganize so that it can better deal with its debt, although it may have to sell off certain assets before it emerges from bankruptcy.

That hefty debt makes it an unlikely takeover target, experts say, but that doesn’t mean that Time Warner Cable or Comcast or some other rival might not consider taking a closer look at Charter now that it has filed for bankruptcy protection.

And the plan is supported by Allen, Microsoft co-founder and one of the world’s richest men. One analyst however said it unlikely that those rivals will swoop in at this point. It is possible that Charter may revive itself in a few months, with much less of a debt load.

Charter's 2-year stock chart

Pity its shareholders though. At 3 cents a share, Charter’s shares are down more than 96 percent in the last year, and light years from the $5 mark its in 2007.

And it’s too soon to tell how all of this will affect Charter’s more than 5 million subscribers, which span 18 states.

Keep an eye on:

  • Anchor Dylan Ratigan out at CNBC? (NY Post)
  • Disney may get an equity stake in Hulu (Paid Content)

(Photo: Reuters)

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