Charter Plummets 5.6% Amid Legal Storm and Earnings Woes—Is the Sell-Off Sustainable?

Summary
• Charter Communications (CHTR) tumbles 5.63% to $220.67, hitting its 52-week low of $214.83
• Over 10 class-action lawsuits loom with lead-plaintiff deadlines in October 2025
• Q3 revenue declines 0.9% to $13.67B, missing estimates as subscriber losses accelerate
• Sector peers like Comcast (CMCSA) also retreat, down 3.09% amid streaming transition pressures

Charter’s stock is in freefall as a deluge of legal alerts, earnings misses, and subscriber attrition collide. The cable giant’s Q3 results revealed a 0.9% revenue decline and 109,000 internet customer losses, while a flood of class-action lawsuits—10 in total—threaten investor confidence. With the stock trading near its 52-week low and technical indicators flashing bearish signals, the question is whether this selloff is a buying opportunity or a deeper crisis in the making.

Legal Overload and Earnings Shock Trigger Sharp Selloff
Charter’s 5.63% intraday plunge is driven by a perfect storm of legal and operational headwinds. Over 10 law firms have issued alerts about pending securities class actions, with lead-plaintiff deadlines clustered around October 14, 2025. These lawsuits, alleging violations of securities laws and investor harm, have created a toxic environment for shareholders. Compounding this, Q3 results showed a 0.9% revenue drop to $13.67B, missing estimates by $70M, alongside 109,000 internet customer losses and 70,000 residential video subscriber declines. The earnings miss and subscriber attrition—accelerating from 110,000 in Q3 2024—signal intensifying competition from streaming services and cord-cutting trends, eroding Charter’s core business.

Cable Sector in Retreat as Streaming Transition Deepens
The broader cable and satellite sector is under pressure as providers like Spectrum and DIRECTV pivot to streaming. Comcast (CMCSA), the sector leader, fell 3.09% on the same day, reflecting shared challenges in retaining traditional TV subscribers. Smaller operators are also shifting to streaming, but Charter’s subscriber losses—80,000 in Q3—outpace its peers. The sector’s struggle to balance legacy infrastructure costs with streaming’s lower margins is evident, with Charter’s 40.7% adjusted EBITDA margin declining 20 bps year-over-year. As consumers migrate to streaming, cable companies face a dual threat: declining revenue from traditional services and rising costs to digitize offerings.

Bearish Setup: Put Options and ETFs to Capitalize on Downside
• 200-day average: 336.66 (far above current price)
• RSI: 28.43 (oversold)
• MACD: -8.65 (bearish divergence)
• Bollinger Bands: Price at $220.67, near lower band ($226.95)

Technical indicators confirm a bearish bias. The RSI at 28.43 suggests oversold conditions, but this often precedes further declines in a strong downtrend. The MACD (-8.65) and negative histogram (-1.94) reinforce momentum to the downside. With the 200-day MA at 336.66, the stock is 38% below its long-term average, indicating structural weakness. The Bollinger Bands show the price is near the lower boundary, a potential trigger for continued selling pressure.

Top Options Contracts:
• CHTR20251107P215 (Put):
- Strike: $215
- Expiration: 2025-11-07
- IV: 70.52% (high volatility)
- Leverage Ratio: 51.55% (moderate)
- Delta: -0.338 (moderate sensitivity)
- Theta: -0.017 (slow time decay)
- Gamma: 0.01999 (moderate sensitivity to price moves)
- Turnover: 39,507 (high liquidity)
- Payoff at 5% Downside: $5.33 (max(0, 215 - 209.63))
- Why: High IV and liquidity make this put ideal for capitalizing on near-term legal and earnings-driven declines.

• CHTR20251107C220 (Call):
- Strike: $220
- Expiration: 2025-11-07
- IV: 46.18% (reasonable)
- Leverage Ratio: 38.89% (moderate)
- Delta: 0.5698 (moderate sensitivity)
- Theta: -1.46 (rapid time decay)
- Gamma: 0.0328 (high sensitivity to price moves)
- Turnover: 192,660 (extremely liquid)
- Payoff at 5% Downside: $0 (max(0, 209.63 - 220))
- Why: While a call seems counterintuitive, the high gamma and liquidity make it a hedge against a short-term rebound or volatility spike.

For ETFs, consider XLF (Financial Select Sector SPDR) if betting on sector-wide legal risks, though no direct leveraged ETFs exist for CHTR. Aggressive traders should prioritize the CHTR20251107P215 put for its high IV and liquidity, while the CHTR20251107C220 call offers a volatility play if the stock bounces off support.

Backtest Charter Stock Performance
I ran into an unexpected issue while extracting the exact dates when Charter (CHTR) suffered an intraday plunge of ≥ –6 % (low ≤ previous-day close × 0.94). To proceed, I have two options:1. Retry the extraction using a different method (might require a few minutes). 2. If you already have –6 % plunge dates (or a shorter list you care about), you can provide them and I will run the event-based back-test immediately.Which approach would you prefer?

Legal and Earnings Headwinds: Time to Exit or Wait for a Bottom?
Charter’s selloff is far from over, with legal risks and subscriber attrition creating a toxic mix. The stock’s 5.63% drop to $220.67—near its 52-week low—suggests further downside as lawsuits and cord-cutting pressures persist. Technical indicators like the RSI (28.43) and MACD (-8.65) confirm a bearish trend, while the 200-day MA at 336.66 remains a distant target. Sector peers like Comcast (CMCSA) are also retreating, down 3.09%, signaling broader challenges in the cable industry. Investors should monitor the $215 support level and the October 14, 2025 legal deadlines. If the stock breaks below $215, the CHTR20251107P215 put offers a high-leverage play. For now, the message is clear: legal and operational risks dominate, and patience is key.