Form 4: Altice USA Director and 10% Owner Next Alt S.a.r.l. Executes Share Transactions and Capped Call Obligations

Next Alt S.a.r.l., a significant shareholder and director of Altice USA, executed transactions involving the sale of 805,227 Class A common shares and the settlement of capped call obligations.

Summary

• Next Alt S.a.r.l., an entity controlled by Patrick Drahi, a director and 10% owner of Altice USA, has reported transactions involving the sale of Class A common stock.
• On November 25, 2024, Next Alt sold a total of 805,227 shares of Class A common stock at prices ranging from $23.3164 to $25.6836 per share.
• These sales were related to the settlement of existing capped call transactions with a financial institution.
• The capped calls, which expire in tranches, required Next Alt to deliver shares of Class A common stock to the counterparty.
• Following these transactions, Next Alt's direct holdings of Class A common stock decreased to 21,951,231 shares.
• Next Alt also holds 16,104,579 call options (obligation to sell) related to the capped call transactions.

Sentiment

Score: 5

Explanation: The document is a neutral disclosure of transactions. While the sale of shares could be seen as slightly negative, it is part of a pre-existing arrangement and not necessarily indicative of a negative outlook.

Negatives

• The sale of a significant number of shares by a major shareholder could be perceived negatively by the market.

Risks

• The continued unwinding of capped call positions could lead to further sales of shares by Next Alt.
• The market may react negatively to the reduction in holdings by a major shareholder.

Future Outlook

The document does not provide specific forward-looking statements, but it implies that further transactions related to the capped calls may occur as they continue to expire.

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

This filing is a routine disclosure of insider transactions, which is common in the public markets. The use of capped calls is a sophisticated financial strategy often employed by large shareholders to manage risk and liquidity.

Comparison to Industry Standards

• The use of capped calls is not uncommon among large shareholders in publicly traded companies, particularly those with significant holdings.
• Similar transactions can be seen in other companies where major shareholders use derivatives to manage their positions.
• The reporting of these transactions is in line with SEC regulations for insider trading and beneficial ownership.

Stakeholder Impact

• Shareholders may be concerned about the sale of shares by a major shareholder, potentially impacting the stock price.
• The transactions are part of a pre-existing agreement and do not necessarily indicate a change in the company's fundamentals.

Next Steps

• Further transactions related to the capped calls are expected as they continue to expire over the next 42 trading days.

Key Dates

Keywords

Altice USA, Next Alt S.a.r.l., Patrick Drahi, Class A common stock, capped calls, share sale, derivative securities, beneficial ownership, director, 10% owner