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Charter shares plunged greater than 8% on Tuesday after its CFO Jessica Fischer said the company could lose broadband subscribers within the fourth quarter.
Charter competitor Comcast‘s stock also slipped greater than 3% in midday trading.
“I can definitely see that it’s likely that we could find yourself with negative web net adds within Q4,” Fischer said on the UBS Global Media and Communications Conference. The company saw subscribers drop in October due partly to the consequences of its dispute with Disney and better rates of interest, and November was “similarly soft,” Fischer said.
Charter added over 60,000 broadband customers in its third quarter this yr. Comcast reported it lost 18,000 broadband subscribers within the third quarter.
Charter has invested billions in efforts to expand its broadband coverage to rural and underserved communities. The company spent $1.1 billion on line extensions within the third quarter, driven by rural expansion efforts.
But line expansions add little value when people aren’t buying homes. The housing market has suffered in recent months as buyers and sellers contend with rising rates of interest and tight supply. Mortgage demand can be at its lowest point in nearly 30 years.
Even so, Fischer believes Charter will return to subscriber growth, citing a possible rebound within the housing market. Adding “value back into video,” referring to Disney and Charters deal to incorporate Disney+ in some Spectrum plans, will even drive competitiveness for Charter, Fischer added.