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 October 31, 2024, to repay debt incurred from European capped call transactions.

Summary

• On October 31, 2024, Next Alt S.a.r.l., an indirect wholly-owned and controlled personal holding company of Patrick Drahi, sold 805,227 shares of Altice USA, Inc.'s Class A common stock.
• The sales were executed 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 counterparty.
• The shares were delivered to the financial institution to repay debt incurred in connection with the execution of the capped calls.
• Next Alt is party to capped call transactions covering a total of 33,819,573 shares of Class A common stock.
• These capped calls expire in equal tranches over a 42-day trading period, starting October 25, 2024, and are automatically exercised upon expiration.
• Patrick Drahi, a director of Altice USA, disclaims beneficial ownership of the reported interests except to the extent of his pecuniary interests.
• Armelle Koelf executed the Form 4 on behalf of Next Alt S.a.r.l. and Patrick Drahi, pursuant to powers of attorney.
• The power of attorney granted to Armelle Koelf is valid until June 30, 2025, unless earlier revoked.

Sentiment

Score: 5

Explanation: The document primarily reports transactions related to existing financial instruments (capped calls). While a large share sale can sometimes be viewed negatively, the context of debt repayment and pre-existing agreements suggests a neutral sentiment.

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

Share sales by significant shareholders and directors are closely monitored by investors as they can indicate management's sentiment about the company's future prospects and financial health. Capped call transactions are often used to hedge against potential stock dilution or to manage risk associated with convertible securities.

Comparison to Industry Standards

• It's common for executives and major shareholders to use instruments like capped calls to manage their exposure to stock price fluctuations.
• The specifics of these transactions, such as the strike prices (98.5%, 103.5% or 108.5% of the reference price) and higher strike prices (149.6%, 154.6% or 159.6% of the reference price), are typical for such agreements.
• Similar transactions can be seen with other companies where large shareholders use derivatives to manage their positions.

Stakeholder Impact

• The share sales could have a minor impact on shareholders due to the increased supply of shares in the market, but the impact is likely mitigated by the context of the capped call transactions.
• The financial institution counterparty to the capped calls is impacted by receiving the shares as repayment of debt.

Key Dates