Charter Drags Its Heels on $3.7 Billion IPO


Investors who were waiting patiently for Charter
Communications Inc.'s $3.7 billion initial public offering are going to have to wait
a little bit longer.

Charter, which first expected to commence its 170-million
share IPO on Oct. 14, has pushed the offering back to the week of Nov. 1.

And Charter is likely to wait even longer -- setting a Nov.
15 target date for the IPO -- mainly because it doesn't want the financial numbers
issued in its prospectus to lose their relevance, said CIBC Oppenheimer Corp. cable and
telecommunications analyst Aryeh Bourkoff.

"I think the company would like to get the deal done
before Nov. 15, before their June numbers go stale," Bourkoff said. "I
don't think any delays can be attributable to a change in strategy."

The delays are more likely due to logistics, according to
Bourkoff. Charter originally planned to begin the offering late in the third quarter, then
pushed the date back to Oct. 14.

Charter never set a date for the IPO, said spokeswoman
Anita Lamont. In a press release announcing the filing of the offering, the company said
it "anticipated" beginning the offering in the third quarter, depending on how
quickly the Securities and Exchange Commission's approval process worked.

Typically, the SEC submits a list of questions to the
company filing for an IPO shortly after the prospectus is submitted. Charter said it was
expecting to receive those questions last week.

While the market for cable stocks may not have played a
role in the delays surrounding Charter's IPO, the outlook for cable stocks is
definitely not as bright as it was a few months ago. Still, Bourkoff believes that will
have little effect on the Charter offering, mainly because at an initial price range of
$17 to $19 a share, the Charter offering is priced at the moderate-range of the market.

"Based on the multiples of companies that are trying
to price this deal, I think the market will be receptive at those levels," Bourkoff

The Charter IPO is one of the most intensely awaited public
offerings in recent years. According to its prospectus, Charter plans to issue 170 million
shares of Class A common stock at a price of between $17 and $19 per share.

After the offering, chairman Paul Allen will retain 57.9
percent of the company's outstanding shares, as well as 98 percent of its voting
control in the form of Class B super-voting stock.

As the fourth-largest cable operator in the country, with
roughly 6 million pro forma subscribers, Charter also would be the biggest cable IPO in
years. Earlier this year Insight Communications Co. tested the public markets with its
IPO, and was rewarded handsomely. Originally priced at $23 per share, Insight's stock
opened at $25.25 per share and closed at $29.94 on their first day of trading. The stock
has since gone as high as $32 per share, before tapering off last week to $28.63. But
despite that dip, Insight is still trading well above its offering price.

Charter, with roughly six times the subscriber base of
Insight, is expected to be warmly embraced by the market, because of its position in the
industry and its management.

Headed by Microsoft Corp. co-founder Allen, Charter has
been making big moves to implement its largest shareholder's vision of a "wired
world." And with Allen's investments in Internet portals, content companies and
competitive-local-exchange carriers, Charter may be one of the major cable operators best
positioned to execute that strategy.