Form 4: Altice USA Director Next Alt S.a.r.l. Executes Capped Calls, Repays Debt with Class A Common Stock

Next Alt S.a.r.l., a 10% owner and director of Altice USA, Inc., executed capped call transactions and repaid debt by delivering Class A common stock.

Summary

• Next Alt S.a.r.l., an indirect wholly-owned and controlled personal holding company of Patrick Drahi, a director of Altice USA, Inc., filed a Form 4.
• The form details transactions related to the exercise and expiration of European capped call transactions.
• Next Alt repaid debt to a financial institution by delivering 268,409 shares of Class A common stock on November 7, 2024, valued at prices ranging from $23.3164 to $25.6836 per share.
• These shares were delivered in connection with the exercise and expiration of capped calls.
• Following the reported transactions, Next Alt beneficially owns 31,613,955 shares of Class A common stock directly.
• Next Alt also holds call options (obligation to sell) for 25,767,303 shares of Class A common stock.
• Patrick Drahi also filed a Form 4 in his capacity as director and 10% owner.
• Armelle Koelf is acting as attorney-in-fact for both Next Alt S.a.r.l. and Patrick Drahi.

Sentiment

Score: 6

Explanation: The sentiment is neutral. The document primarily reports transactions related to existing financial instruments (capped calls) and debt repayment. There are no explicit positive or negative indicators, and the actions appear to be part of a pre-planned financial strategy.

Industry Context

Capped call transactions are often used by companies or major shareholders to hedge against potential dilution from convertible securities or to manage the cost of equity financing. The exercise of these calls and subsequent debt repayment suggests a strategy to manage financial obligations and potentially reduce risk associated with share price fluctuations.

Comparison to Industry Standards

• Capped call transactions are a relatively common hedging strategy employed by large shareholders and companies, particularly in the technology and telecommunications sectors.
• Similar strategies have been used by companies like Tesla and Netflix to manage dilution related to convertible notes.
• The size of the capped call transaction (33,819,573 shares) is significant but not uncommon for companies with large market capitalizations and substantial insider ownership.

Stakeholder Impact

• The transactions may have a minor impact on shareholders due to the sale of shares, but the capped call structure is designed to mitigate significant price fluctuations.
• Employees are unlikely to be directly affected by these transactions.
• Customers and suppliers are unlikely to be directly affected by these transactions.
• Creditors are indirectly impacted as debt is being repaid.

Key Dates