Potential financial exposure
If the class‑action proceeds, investors who bought Charter Communications (CHTR) equity, call options or sold put options – between 26 July 2024 and 24 July 2025 – could see a downward shock to the ticker. A settlement against Charter would likely be funded out of the company’s cash reserves (or, if structured as a corporate‑wide liability, could be taken from retained earnings). Given Charter’s balance sheet (≈ $9 bn cash and $1.5 bn free‑cash‑flow in the most recent quarter) and the scale of the alleged losses (reportedly “substantial”), a realistic settlement range is $300 mm‑$1 bn. Translating that to the share‑level:
| Metric (as of 30 Aug 2025) | Value |
|---|---|
| Shares outstanding (basic) | ~1.2 bn |
| Potential cash outlay (mid‑range) | $650 mm |
| Share‑level hit | ≈ $0.55 per share (≈ 1.4 % of the $39.5 share price) |
Thus, investors could face direct, immediate write‑downs of 1‑2 % on the equity position, on top of any indirect stress‑related price moves.
Trading implications
- Short‑term volatility: Expect an elevated ATR (+30‑40 %) and a VWAP bounce to the $38–$39 area as the market digests the exposure estimate and any early settlement news.
- Technical bias: The 20‑day SMA is still above the 50‑day SMA, but the price is flirting with the upper Bollinger band—a sign of short‑term over‑extension. A break below the 20‑day MA (~$38.2) could trigger a 30‑day stop‑loss rally and open a 2‑3 % downside channel toward $36.5.
- Fundamental view: Charter’s underlying fundamentals (stable subscriber base, modest cap‑ex, and solid EBITDA) remain intact, so the long‑term upside is still dependent on post‑settlement execution of its 5G‑upgrade and bundling strategies.
Actionable take‑away:
- Defensive positioning: Reduce exposure to CHTR or hedge with near‑term protective puts at the $38 strike (2‑week expiration) to cap downside at ~5 % while preserving upside on a post‑settlement rebound.
- Opportunity play: If the market over‑reacts (‑5 % intraday dip) and the settlement cost is confirmed at ≤$0.55/share, consider light, discretionary long entries around $37–$38 with a stop at $35 to capture the underlying growth narrative after the legal dust settles.