Form 4: Altice USA Director Next Alt S.a.r.l. Sells 805,227 Shares to Repay Debt from Capped Call Transactions

Next Alt S.a.r.l., a 10% owner and director of Altice USA, Inc., sold 805,227 shares of Class A common stock on November 5, 2024, to repay debt incurred from European capped call transactions.

Summary

• On November 5, 2024, Next Alt S.a.r.l., a director and 10% owner of Altice USA, Inc. (ATUS), sold a total of 805,227 shares of Class A common stock.
• The sales were executed in three tranches at prices of $23.3164, $24.5, and $25.6836 per share.
• These transactions were related to the exercise and expiration of existing bilateral European capped call transactions with a financial institution.
• The shares were delivered to the financial institution to repay debt incurred in connection with the execution of these capped calls.
• Next Alt is party to capped call transactions covering 33,819,573 shares of Altice USA Class A common stock, which expire in tranches over a 42-day period starting October 25, 2024.
• Patrick Drahi, a director of Altice USA, indirectly controls Next Alt.
• Armelle Koelf acted as attorney-in-fact for both Next Alt and Patrick Drahi in these transactions.

Sentiment

Score: 5

Explanation: The document primarily reports transactions related to existing financial arrangements. While the share sales could exert some downward pressure, the overall sentiment is neutral as it reflects a planned unwinding of capped call positions.

Risks

• Continued sales of shares related to the capped call transactions could put downward pressure on the stock price.
• The complex nature of the capped call transactions may create uncertainty for investors.

Future Outlook

The document indicates ongoing expiration and exercise of capped calls over a 42-day period, suggesting continued transactions involving Altice USA shares.

Industry Context

Capped call transactions are often used by companies or major shareholders to hedge against potential dilution from convertible securities or to monetize existing equity positions. The unwinding of these transactions can impact the trading volume and price of the underlying stock.

Comparison to Industry Standards

• Capped call transactions are a relatively common hedging strategy employed by large shareholders and corporations, similar to those used by companies like Charter Communications or Liberty Global.
• The size of the capped call transaction, covering 33,819,573 shares, is significant but not uncommon for companies with large market capitalizations and substantial insider ownership.

Stakeholder Impact

• Shareholders may experience short-term price volatility due to the share sales.
• The transactions could affect the company's stock valuation and market perception.

Next Steps

• Continued monitoring of Altice USA's stock price and trading volume.
• Tracking the remaining capped call expirations and potential impact on share supply.

Key Dates