Charter Communications Faces Lawsuit Amid Customer Declines and Stock Price Drop
- Charter Communications faces a class action lawsuit for allegedly misleading investors about the impact of the ACP's end.
- The company lost 117,000 Internet customers after the ACP ended, directly affecting its revenue and stock price.
- Market sentiment remains bearish for Charter, despite potential analyst upgrades and a need to address customer losses.
Lawsuit Highlights Challenges for Charter Communications Amid Customer Declines
Charter Communications, Inc. faces mounting legal challenges as Robbins Geller Rudman & Dowd LLP announces a class action lawsuit on behalf of individuals who acquired the company’s securities between July 26, 2024, and July 24, 2025. The lawsuit, Sandoval v. Charter Communications, Inc., filed in the Southern District of New York, accuses the company and its executives of violating the Securities Exchange Act of 1934. Central to the allegations is the claim that Charter misled investors regarding the repercussions of the Federal Communications Commission’s Affordable Connectivity Program (ACP) ending, which reportedly contributed to a significant loss of Internet customers.
The lawsuit details that following the cessation of the ACP, Charter Communications witnessed a troubling decline of 117,000 Internet customers in the second quarter of 2025. This included approximately 50,000 disconnects directly tied to the program's conclusion. The implications of these losses were stark, as the company reported an EBITDA of $5.7 billion, marking only a 0.5% growth. This disappointing performance triggered a notable 18% drop in Charter's stock price, highlighting the disconnect between the company's previous optimistic outlook and the harsh realities of its operational challenges.
As potential lead plaintiffs prepare to seek appointment in this case, the lawsuit not only underscores concerns about Charter's management strategies but also reflects broader issues within the telecommunications industry. Investors are increasingly wary of how policy changes, such as the end of the ACP, can dramatically impact customer retention and revenue streams. With a substantial number of customers lost, Charter's ability to navigate these challenges effectively will be critical for its future success.
In addition to the lawsuit, Charter Communications is experiencing bearish sentiment in the market, with its stock declining over 4% recently. Despite Bernstein's recent upgrade of Charter's rating, the firm acknowledges that ongoing secular challenges greatly influence its valuation. Analysts suggest a potential upside for Charter, with an average price target indicating a possible 54% increase from current levels, yet the company must first address the immediate repercussions of customer losses and regulatory changes.
The class action lawsuit serves as a critical reminder of the turbulent landscape in which Charter Communications operates, underscoring the need for the company to reassess its strategies in light of significant customer attrition.
