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

Next Alt S.a.r.l., an indirect wholly-owned personal holding company of Altice USA director Patrick Drahi, sold shares of Class A common stock to repay debt incurred from European capped call transactions.

Summary

• Next Alt S.a.r.l., an indirect wholly-owned and controlled personal holding company of Patrick Drahi, sold 268,410 shares of Altice USA, Inc. Class A common stock at prices of $23.3164, $24.5, and $25.6836 on December 23, 2024.
• These sales were related to the exercise and expiration of capped call transactions.
• The shares were used to repay debt to a financial institution incurred in connection with the execution of the capped calls.
• Following the transactions, Next Alt still beneficially owns 6,651,882 shares of Class A common stock.
• Next Alt is party to existing bilateral European capped call transactions with a financial institution counterparty with respect to a total of 33,819,573 shares of Class A common stock of the Issuer.
• The Capped Calls expire in equal tranches over a 42 scheduled trading day period, beginning 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 acted as attorney-in-fact for both Next Alt S.a.r.l. and Patrick Drahi, executing the Form 4 filings.

Sentiment

Score: 5

Explanation: The sentiment is neutral. The document primarily reports transactions related to capped calls, which are a known financial instrument. There are no explicit positive or negative implications presented, and the transactions appear to be part of a pre-existing arrangement.

Future Outlook

The capped call transactions will continue to expire in tranches over the remaining scheduled trading days.

Management Comments

• Patrick Drahi disclaims beneficial ownership of the reported interests except to the extent of his pecuniary interests.

Industry Context

Capped call transactions are often used by companies or major shareholders to hedge against potential stock dilution or to manage risk associated with convertible securities or stock options. The unwinding of these transactions can create selling pressure on the stock.

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 Tesla and Microstrategy.
• The size of the capped call transaction, involving 33,819,573 shares, is significant but not uncommon for companies with large market capitalizations and substantial insider ownership.
• The staggered expiration of the capped calls over a 42-day period is a typical approach to manage market impact and liquidity.

Stakeholder Impact

• Shareholders may experience short-term price fluctuations due to the share sales related to the capped call exercises.
• The company's overall financial position is not directly impacted by these transactions, as they involve existing shares and hedging arrangements.

Next Steps

• Next Alt will continue to deliver shares as the remaining capped calls expire.
• The market will observe the impact of these transactions on the stock price.

Key Dates