Who Are Charter Communications, Inc.’s Major Shareholders?
Charter Communications (NASDAQ: CHTR) has had quite a run ever since its transformative merger with the old Time Warner Cable and Brighthouse Networks in 2016. Not only has the company been integrating these two acquisitions and performing well this year, but there's also been chatter that Charter might be looking to acquire a wireless company, or perhaps even be an acquisition target itself.
Even if none of those things happen, the company has been a great operator under CEO Tom Rutledge and has some very famous shareholders, including some of the best value creators in recent business history. If you buy into Charter's shares, you're in good company.
Liberty Broadband Corporation
Liberty Broadband Corporation (NASDAQ: LBRDK) was spun out of Liberty Media Corporation (now the Liberty Media Formula One Group (NASDAQ: FWONA)) as a tracking stock in 2014. A tracking stock is when a company spins out a subsidiary into a publicly traded entity, which "tracks" only that subsidiary's performance. Liberty Broadband holds Liberty Media's 27% interest in Charter Communications, which Liberty Media purchased in 2013. Liberty Broadband now owns 25% of the post-merger company.
Liberty Media (and thus Liberty Broadband), is owned by John Malone, who is perhaps the most famous and successful cable executive of all time. His legendary career at TCI (the ancestor company to Liberty), where he built the largest cable company in the country before selling parts to AT&T (NYSE: T) and Comcast (NASDAQ: CMCSA), was profiled in William Thorndike's book on great CEOs The Outsiders. Having Malone as an overseer should certainly be of comfort to Charter shareholders.
Advance Newhouse
The Advance Newhouse partnership (private) is the second-largest shareholder in Charter with a 13.9% stake. Advance Newhouse received its stake as part of the 2016 merger when Charter acquired both Time Warner Cable and Brighthouse Communications, a regional cable provider mostly located in Florida, which was owned by Advance Newhouse at the time.
Advance Newhouse is a private company owned by the descendants of the Newhouse publishing dynasty, which goes back all the way to 1922 when Sam Newhouse bought a stake in the Staten Island Advance newspaper.
The company currently owns a variety of publishing and media assets, including 30 local newspapers and associated websites across the country, a 31% stake in Discovery Communications (NASDAQ: DISCA), and the stake in Charter.
Berkshire Hathaway
John Malone is not the only person to both appear in The Outsiders and also own Charter stock. So does Warren Buffett, through his conglomerate Berkshire Hathaway (NYSE: BRK-A) (NYSE: BRK.B). As of the second quarter 2017, Berkshire owned 9.4 million shares, or 3.66%, of Charter. The $3 billion stake may not have been purchased by the Oracle of Omaha himself, but likely by one of his hand-picked stock-pickers, Todd Combs or Ted Wechsler. Berkshire doesn't disclose which manager picks which stocks, so whoever made the decision is likely to remain a mystery.
The Children's Investment Fund
Owning an even larger stake than Berkshire is the Children's Investment Fund, a value-oriented activist hedge fund based in London, England. TCI was founded by Christopher Hohn in 2003 with the goal of donating some of the fund's profits to The Children's Investment Fund Foundation, which aims to bring children out of poverty in developing countries. TCI is the largest shareholder in Charter besides Advance/Newhouse and Liberty Broadband, with a 5.37% stake.
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