Form 4: Altice USA Director and 10% Owner Next Alt S.a.r.l. Disposes of Shares Through Capped Call Transactions

Next Alt S.a.r.l., a significant shareholder and director of Altice USA, Inc., disposed of 805,227 Class A common shares through the exercise of capped call transactions.

Summary

• Next Alt S.a.r.l., an entity controlled by Patrick Drahi, a director and 10% owner of Altice USA, Inc., has reported the disposal of 805,227 Class A common shares.
• These shares were disposed of through the exercise of existing capped call transactions with a financial institution.
• The transactions occurred on November 21, 2024, with shares sold at varying prices of $23.3164, $24.5, and $25.6836 per share.
• The capped calls are part of a larger agreement covering 33,819,573 shares, expiring in tranches over a 42-day period starting October 25, 2024.
• The exercise of these capped calls resulted in Next Alt repaying debt to the financial institution by delivering the shares.
• Following these transactions, Next Alt's direct holdings of Class A common stock decreased to 23,561,685 shares, and its holdings of call options decreased to 17,715,033.

Sentiment

Score: 5

Explanation: The document reports a planned share disposal through capped calls, which is neither inherently positive nor negative. The market reaction will depend on how it interprets the transaction.

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 reduction in Next Alt's holdings.
• The complex nature of the capped call transactions may introduce uncertainty.

Future Outlook

The capped call transactions will continue to expire in tranches over the next 42 trading days, potentially leading to further share disposals.

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 relatively 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 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 react to the share disposals, potentially impacting the stock price.
• The transactions do not directly impact employees, customers, or suppliers.

Next Steps

• The remaining capped call tranches will continue to expire over the next 42 trading days.
• Next Alt may continue to dispose of shares as the capped calls are exercised.

Key Dates

Keywords

Altice USA, Next Alt S.a.r.l., Patrick Drahi, Capped Calls, Share Disposal, Form 4, Beneficial Ownership, Derivative Securities