Form 4: Altice USA Director Next Alt S.a.r.l. Repays Debt by Delivering Shares Following Capped Call Exercises

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

Summary

• On December 17, 2024, Next Alt S.a.r.l., an indirect wholly-owned and controlled personal holding company of Patrick Drahi, repaid debt to a financial institution by delivering shares of Altice USA, Inc. Class A common stock.
• This repayment was connected to the exercise and expiration of existing bilateral European capped call transactions.
• Next Alt sold 268,410 shares at $23.3164, 268,410 shares at $24.5, and 268,410 shares at $25.6836.
• Following these transactions, Next Alt directly owns 9,872,802 shares of Class A common stock.
• The transactions also involved the exercise of call options, resulting in Next Alt holding 4,026,150 call options.

Sentiment

Score: 5

Explanation: The document describes routine transactions related to capped calls and debt repayment. It doesn't contain information that would significantly shift investor sentiment positively or negatively.

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.

Industry Context

Capped call transactions are often used by companies to limit potential dilution from convertible securities or to hedge against increases in share price. The exercise of these capped calls and subsequent share delivery is a fairly common financial maneuver.

Comparison to Industry Standards

• Capped call transactions are a common hedging strategy employed by companies, particularly in the technology and telecommunications sectors, to manage potential dilution from convertible notes or warrants.
• Companies like Tesla and MicroStrategy have used similar strategies to manage their capital structure and reduce potential dilution.
• The size of the capped call transactions, involving 33,819,573 shares, is significant but not uncommon for large publicly traded companies.

Stakeholder Impact

• The share delivery could have a minor dilutive effect on existing shareholders.
• The debt repayment strengthens the company's financial position.

Key Dates