Why Charter Communications Plunged in September

CHTR plunged 27.3% in September as rising long-term interest rates pressured the cable operator's $94 billion debt load, while an analyst downgrade added fuel by citing competitive threats from SpaceX (SPCX) and its Starlink satellite broadband service.

Two forces drove the selloff. First, the debt burden: at $94 billion, CHTR's balance sheet is acutely sensitive to higher long-term rates, which raise the cost of carrying and refinancing that obligation. Second, the downgrade put a name on the competitive risk, pointing directly at Starlink as a rival for broadband customers.

The valuation case looks tempting on the surface. CHTR trades below its EBITDA, a multiple that screens as cheap. Interpretation: that discount likely reflects the market pricing in the two problems above, not an overlooked bargain. Declining revenue undercuts the cheap-multiple argument, and the source flags potential bankruptcy risk if the debt load and shrinking top line persist together.

CHTRP, the company's related preferred security, sits in the same capital structure and faces the same debt-driven concerns, though the source offers no separate pricing on it.