In recent years, it seems that when there is a sudden drop in the stock price for a publicly traded company, a class action suit will soon follow. In the broadband industry, Charter was recently sued after its stock dropped $70.25 per share on July 25, from a price the day before of $380 per share.

The stock price dropped after Charter announced its earnings results on July 24 for the second quarter of 2025. The class action suit blames the sudden stock price drop on Charter’s misleading statements about the impact of the end of the ACP program. That program provided a $30 subsidy for home broadband for qualifying low-income households. Charter was the most aggressive ISP in the ACP program and had enrolled around 5 million households. When Charter discussed its second quarter results, the company said that it lost 117,000 broadband customers for the quarter, and that 50,000 of  those losses were the residual impact of the end of ACP.

Charter explained that the 50,000 customers it lost were due to households unable to afford monthly payments – something that it believes would not have occurred if ACP were still in place. These weren’t ACP customers, since that plan ended a year earlier, but the customers were similar to those who had been enrolled in ACP.

I did a little digging to look deeper at the facts. I was curious how Charter’s customer losses compared to those of other publicly traded cable companies. The following chart shows the customer performance for each company since the end of 2023.All of the big cable companies are losing customers – something that is a constant headline for the industry. Analysts pin most of these losses on fierce competition from FWA cellular carriers and fiber overbuilders, both of which have been adding customers at a rapid pace over the last two years. The chart shows that Charter has done a better job of minimizing customer losses than all of the other publicly traded cable companies. Over 18 months, Charter lost 2.2% of its 4Q23 customers, a lower percentage drop than the other companies.

The loss of ACP customers wasn’t the only bad news in the Charter earnings release. Charter announced earnings per share of $9.18, up from $8.49 per share a year earlier. But according to stock analysts, the earnings were lower than the expected earnings of over $10 per share. Possibly due to the expectations of higher expected earnings, Charter stock had climbed to a high price of $427.25 on May 16, 2025.

The Charter stock price drop also can’t be blamed on the overall market, because on July 25, the S&P 500, the Nasdaq Composite, and the Dow Jones Industrial Average all rose to near all-time highs for each index.

I am the last person you’d ever ask for stock advice, and big market swings like this are a mystery to me. But still, when looking at the facts, it’s hard to think that a company with 30 million broadband customers would be dinged by an 18% stock price drop due to losing only 50,000 low-income customers. However, that is certainly possible, and I guess a jury will have to eventually figure it out.