NEW YORK (TheStreet) -- Charter Communications (CHTR) shares are up 7.7% to $140 on Monday following the completion of a deal with Comcast (CMCSA) that could net the cable company an extra 3.9 million subscribers.
The terms of the deal hinge on the approval of Comcast's proposed merger with Time Warner Cable (TWC) by U.S. government regulators.
In an effort to make the merger more attractive to FCC regulators, Charter Communications will acquire 1.4 million subscribers from Comcast, making Charter the second biggest cable company in the country with 5.7 million subscribers.
Additionally Comcast will swap 1.6 million subscribers with Charter in an attempt to make both companies more geographically diverse.
Finally, Comcast will spin off 2.5 million subscribers into an independent, publicly-traded company in which Comcast -- and potentially former Time Warner Cable -- shareholders will hold a 67% stake. Charter Communications shareholders will own the other 33%.
TheStreet Ratings team rates CHARTER COMMUNICATIONS INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate CHARTER COMMUNICATIONS INC (CHTR) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet."