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., a 10% owner and director of Altice USA, Inc., 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 shares of Altice USA, Inc. Class A common stock on November 6, 2024.
• The sales were executed to repay debt to a financial institution related to existing bilateral European capped call transactions.
• A total of 268,409 shares were sold at prices of $23.3164, $24.5, and $25.6836 per share.
• Following the transactions, Next Alt beneficially owns 32,419,182 shares of Class A common stock.
• Next Alt is party to capped call transactions covering 33,819,573 shares of Class A common stock, expiring in tranches beginning October 25, 2024.
• 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 on behalf of Next Alt S.a r.l. and Patrick Drahi pursuant to powers of attorney.
• The power of attorney grants Armelle Koelf the authority to execute and file Forms 3, 4, and 5 on behalf of Next Alt S.a.r.l. and Patrick Drahi until June 30, 2025.

Sentiment

Score: 5

Explanation: The document primarily reports transactions related to existing financial arrangements (capped calls). It doesn't contain overtly positive or negative information about the company's performance or future prospects. The sentiment is neutral.

Risks

• The continued exercise and expiration of the capped calls could lead to further sales of Altice USA shares by Next Alt.
• The capped call transactions involve complex settlement terms based on the share price, which could impact the number of shares delivered.
• The sales by a major shareholder could exert downward pressure on the stock price.

Future Outlook

The document indicates that Next Alt will continue to exercise and expire capped calls, which will likely result in further share sales. The timing and amount of these sales will depend on the terms of the capped call transactions and the share price of Altice USA.

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 and major shareholders to hedge against potential dilution from convertible securities or to monetize a portion of their holdings without directly selling shares on the open market. The unwinding of these transactions can create volatility in the 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 other publicly traded companies like Charter Communications or Comcast when managing their capital structure or hedging against potential dilution.
• The size of the capped call transaction (33,819,573 shares) is significant but not unusual for a company of Altice USA's size and market capitalization; similar transactions can be observed in other large-cap telecommunications and media companies.

Stakeholder Impact

• Shareholders may experience short-term price volatility due to the share sales.
• The transactions could impact the company's capital structure and share dilution.
• The unwinding of the capped call transactions could affect the counterparty financial institution.

Next Steps

• Continued monitoring of Altice USA share price and trading volume.
• Tracking the expiration of the remaining capped call tranches.
• Observing any further transactions by Next Alt S.a.r.l. or other major shareholders.

Key Dates