Extended Deal With Samsung Is Positive For Corning Incorporated (NYSE:GLW)

Posted by Chris Bell October 24, 2013 0 Comment 1327 views

Since Tuesday, Corning Incorporated (NYSE:GLW)’s shares have been on the rise after it announced that it will assume 100%-ownership of one Samsung electronics subsidiary. This move now guarantees that Corning Incorporated (NYSE:GLW) will be the supplier of crystal-display glass to Samsung right through to 2023. The former will buy Samsung’s 43% stake in the LCD glass joint-venture in Korea and will buy-out all shares from minority shareholders.

Exciting phase for both companies

Corning Incorporated (NYSE:GLW)’s Chairman and Chief Executive Officer, Wendell P. Weeks, said that they are very excited to be entering this new collaboration phase in their 40 year equity-relationship with Samsung, which is one of the leading consumer electronics companies in the world. He said that the agreements provide very important strategic and financial benefits to both the companies.

The agreement

Samsung Display will get $1.9M worth of Corning Incorporated (NYSE:GLW)’s preferred shares. In addition, it will be investing $400M more in Corning Incorporated (NYSE:GLW) preferred shares. If these shares were to be converted, they would give

Samsung Display a 7.4% interest in the company. These transactions are expected to close in the 2014Q1. Along with this announcement, Corning Incorporated (NYSE:GLW) issued its preliminary Q3 results. It reported core-earnings of 33 cents/share which is an 18% increase over the 28 cents that was reported in the 2012Q3.

Wednesday’s trading

In Wednesday’s trading, Corning Incorporated (NYSE:GLW) rose by 14.14%. The opening price of the shares was $18.04, which climbed to an intraday high of $18.07 and dipped to a close of $17.52. Approximately 87.16 million shares were traded on Wednesday while an average volume of 12.79 million shares were traded over a 30 day period. The 52-week low of Corning Incorporated (NYSE:GLW) shares is $10.71 and its 52-week high is $18.07. Corning Incorporated (NYSE:GLW) has a market capitalization of $25.59 billion.

About Chris Bell

Chris Bell is an investing reporter for GDP Insider. Chris covers financial markets and Wall Street, concentrating on developments affecting individual investors and their portfolios. Chris is also over consumer reporter and covers a wide variety of issues ranging from housing to immigration to urban poverty. Chris graduated from the University of Scranton with a degree in Communication and Philosophy. Chris's diligent investigations earned him the honor of being named "Best Reporter" once by the Headliners Foundation of Texas and once by the Houston Press Club.

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