Form 4: Altice USA Director and 10% Owner Sells Shares to Cover Capped Call Obligations

Next Alt S.a.r.l., an entity controlled by Altice USA director Patrick Drahi, sold 805,230 shares of Class A common stock to cover obligations from capped call transactions.

Summary

• Next Alt S.a.r.l., a personal holding company controlled by Altice USA director Patrick Drahi, sold a total of 805,230 shares of Altice USA Class A common stock on December 11, 2024.
• The sales were executed in three tranches at prices of $23.3164, $24.50, and $25.6836 per share.
• These transactions were related to the expiration of existing capped call transactions, which required Next Alt to deliver shares to a financial institution.
• The capped calls are part of a larger transaction involving 33,819,573 shares of Class A common stock, expiring in tranches over a 42-day period starting October 25, 2024.
• The shares were delivered to repay debt incurred when the capped calls were initially executed.

Sentiment

Score: 5

Explanation: The document is neutral in sentiment as it primarily reports a transaction related to existing financial obligations. While the share sales could be seen as negative, they are a result of a pre-existing agreement.

Negatives

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

Risks

• Continued sales of shares by Next Alt due to the capped call expirations could put downward pressure on the stock price.
• The complex nature of the capped call transactions may introduce uncertainty for investors.

Future Outlook

The document does not contain any specific forward-looking statements, but it implies that further share sales may occur as the remaining capped call tranches expire.

Management Comments

• Next Alt is an indirect wholly-owned and controlled personal holding company of Patrick Drahi.
• 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 type of transaction is not uncommon for large shareholders who use derivatives to manage their positions. The use of capped calls is a strategy to limit potential losses while still participating in potential gains.

Comparison to Industry Standards

• Capped call transactions are a common strategy used by large shareholders to manage risk and liquidity.
• The specific details of the capped call transactions are complex and not easily comparable to other standard transactions.
• The share sales are a result of the expiration of these specific capped call contracts, which is a unique situation.

Stakeholder Impact

• Shareholders may experience some downward pressure on the stock price due to the share sales.
• The transactions do not appear to have a direct impact on employees, customers, or suppliers.

Next Steps

• Further share sales may occur as the remaining capped call tranches expire.
• The company will likely continue to monitor the impact of these transactions on the stock price.

Key Dates

Keywords

Altice USA, Next Alt S.a.r.l., Patrick Drahi, Capped Calls, Share Sale, Director, 10% Owner, Class A Common Stock