Next Alt S.a.r.l., the personal holding company of Patrick Drahi, has sold a significant portion of its holdings in Altice USA, Inc. (NYSE:ATUS). According to a recent SEC filing, Next Alt disposed of a total of 805,227 shares of Altice USA's Class A common stock on October 28. The shares were sold at prices ranging from $23.3164 to $25.6836, resulting in a total transaction value of approximately $19.7 million.
Following these transactions, Next Alt's ownership in Altice USA decreased, leaving them with 38,055,771 shares. Drahi, who serves as a director and is a significant shareholder of Altice USA, continues to maintain a substantial stake in the company through Next Alt. The transactions were part of a broader strategy involving the expiration of existing capped call transactions, which were settled by delivering shares to a financial institution.
In other recent news, Altice USA has been the subject of a revised outlook from Citi. Following the company's Q2 2024 financial results and recent disclosures, Citi reduced Altice's price target to $2.50 from $3.00 but maintained its Buy rating. The firm emphasized the potential for Altice USA to restructure operations, monetize non-core assets, and benefit from strategic advantages due to its geographic reach and growing interest in combined mobile and broadband services.
Altice USA reported Q2 2024 revenues of $2.2 billion and an adjusted EBITDA of $867 million, marking year-over-year declines of 3.6% and 5.9% respectively. However, the company saw an increase in fiber and mobile customers, notwithstanding a net loss of 51,000 broadband subscribers. The company's capital expenditures were down by 27% year-over-year to $348 million, with a full-year CapEx expected to be under $1.6 billion.
These are recent developments, which also include the company's stable debt maturity profile until 2027, with a weighted average cost of debt at 6.5%. Despite a reduced price target, Citi's continued Buy rating indicates a belief in Altice USA's prospects. The firm acknowledges risks associated with its assessment, primarily that Altice USA's EBITDA might not meet expectations, potentially increasing the company's net debt leverage and diminishing equity value for shareholders.
InvestingPro Insights
Recent data from InvestingPro sheds additional light on Altice USA's financial position and market performance following Patrick Drahi's significant share sale. The company's market capitalization currently stands at $1.66 billion, reflecting the recent changes in ownership structure and market sentiment.
Despite the recent share sale by a major insider, Altice USA has shown some positive market momentum. An InvestingPro Tip highlights that the stock has seen a significant return over the last week, with data showing a 13.72% price total return. This short-term gain is complemented by a strong 35.98% return over the last three months, suggesting renewed investor interest in the company.
However, it's important to note that Altice USA faces some financial challenges. The company was not profitable over the last twelve months, with a negative P/E ratio of -20.44. On a more positive note, analysts predict that the company will return to profitability this year, which could explain the recent stock price recovery.
For investors seeking a more comprehensive analysis, InvestingPro offers 8 additional tips for Altice USA, providing a deeper understanding of the company's financial health and market position.
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