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, and a 10% owner and director of Altice USA, Inc., filed a Form 4.
• The form reports transactions related to the exercise and expiration of existing bilateral European capped call transactions with a financial institution.
• Next Alt repaid debt incurred in connection with the execution of these capped calls by delivering 268,409 shares of Class A common stock on November 4, 2024, at prices ranging from $23.3164 to $25.6836 per share.
• These capped calls relate to a total of 33,819,573 shares of Class A common stock and expire in equal tranches over a 42-day period starting October 25, 2024.
• Patrick Drahi also reported these transactions as a director and 10% owner.
• Armelle Koelf executed the form on behalf of both Next Alt S.a.r.l. and Patrick Drahi pursuant to powers of attorney.
• Following the reported transactions, Next Alt beneficially owns 34,029,636 shares of Class A common stock directly and 28,182,984 derivative securities indirectly.

Sentiment

Score: 6

Explanation: The document primarily reports transactions related to existing financial instruments (capped calls) and debt repayment. It doesn't contain overtly positive or negative information, but the active management of risk through capped calls can be seen as a neutral to slightly positive sign.

Future Outlook

The capped calls expire in equal tranches over a 42 scheduled trading day period, beginning October 25, 2024, and are automatically exercised upon expiration.

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

Capped call transactions are often used by companies or major shareholders to hedge against potential dilution from convertible securities or to manage risk associated with stock-based compensation programs. The use of capped calls suggests that Next Alt S.a.r.l. is actively managing its exposure to Altice USA's stock price.

Comparison to Industry Standards

• Capped call transactions are a relatively common hedging strategy employed by large shareholders and companies, similar to those used by companies like Charter Communications and Comcast to manage dilution related to convertible notes or stock options.
• The size of the capped call transaction, covering 33,819,573 shares, is significant but not unusual for a company the size of Altice USA.
• The execution and expiration of these capped calls, along with the associated debt repayment, are typical financial maneuvers seen in companies with complex capital structures.

Stakeholder Impact

• The transactions may have a minor impact on shareholders due to the delivery of shares to repay debt, but the capped call structure is designed to limit potential dilution.
• Employees are unlikely to be directly affected by these transactions.

Key Dates