Form 4: Altice USA Director and 10% Owner Disposes of Shares Through Capped Call Transactions

Next Alt S.a.r.l., a holding company controlled by Altice USA director Patrick Drahi, disposed of 805,227 shares of Class A common stock through the exercise of capped call transactions.

Summary

• Next Alt S.a.r.l., an indirect wholly-owned and controlled personal holding company of Patrick Drahi, disposed of 805,227 shares of Altice USA Class A common stock on November 8, 2024.
• The shares were disposed of through the exercise of existing bilateral European capped call transactions.
• These capped calls are expiring in tranches over a 42-day period, starting October 25, 2024, and are automatically exercised upon expiration.
• The transactions occurred at varying prices: $23.3164, $24.5, and $25.6836 per share.
• The total number of shares subject to these capped calls is 33,819,573.
• Next Alt repaid debt to the financial institution by delivering the shares.
• Patrick Drahi is a director and 10% owner of Altice USA, and Next Alt has certain rights to appoint directors of the Issuer.

Sentiment

Score: 4

Explanation: The document details a share disposal by a major shareholder, which could be viewed negatively by the market. However, it is part of a pre-existing arrangement, so the impact is likely to be limited.

Negatives

• The disposal of shares by a major shareholder could be perceived negatively by the market.

Risks

• The ongoing exercise of capped calls could lead to further share disposals by Next Alt.
• The market may react negatively to the continued selling pressure from these transactions.

Future Outlook

The capped calls are expiring in tranches over a 42-day period, suggesting further share disposals are likely.

Management Comments

• Each Reporting Person disclaims beneficial ownership of all interests reported on this Form 4 except to the extent of such Reporting Person's pecuniary interests.

Industry Context

The use of capped call transactions is a common strategy for large shareholders to manage their exposure and potentially monetize their holdings. This transaction is specific to Altice USA and its major shareholder.

Comparison to Industry Standards

• Capped call transactions are a relatively common financial instrument used by large shareholders to manage risk and monetize holdings, similar to strategies employed by other major shareholders in publicly traded companies.
• The specific terms of the capped calls, such as the strike prices and expiration dates, are unique to the agreement between Next Alt and its counterparty, making direct comparisons to other companies difficult.

Stakeholder Impact

• Shareholders may experience some volatility in the share price due to the ongoing share disposals.
• The transactions do not appear to have a direct impact on employees, customers, or suppliers.

Next Steps

• The remaining capped calls will continue to expire over the next 42 trading days, potentially leading to further share disposals.
• The market will likely monitor the impact of these transactions on the share price.

Key Dates

Keywords

Altice USA, Next Alt S.a.r.l., Patrick Drahi, capped calls, share disposal, Form 4, derivative securities, beneficial ownership