The Zhitong Finance App learned that before the US stock market on Monday, Corning (GLW.US) stock price fell more than 8%. Earlier, the company announced a new share issuance plan, which could raise up to 2 billion US dollars, raising investors' concerns about the dilution of potential shareholders' rights.
The specialty glass and fiber maker said in documents submitted last Friday that it has signed an equity distribution agreement with Goldman Sachs to sell common shares through a “market-price offering” program. Unlike traditional secondary offerings, Corning does not set a fixed price or a specific number of shares to be sold. Instead, the company can determine the timing, price, and size of a single sale based on market conditions and other conditions. From time to time, these shares will be sold through market transactions or other permitted methods.
Prior to this offering, Corning's stock price rose sharply this year. Corning's stock price has risen about 91% so far this year, mainly driven by market optimism about the company's key card position in the AI infrastructure sector. Corning has reached a major fiber and connectivity agreement with hyperscale cloud service providers, and recently announced a multi-billion dollar agreement with Verizon; at the same time, Nvidia has pledged to invest up to $3.2 billion through a share warrant arrangement to support Corning's production capacity expansion.
However, after the announcement of the second-quarter results, Corning's stock price fell sharply, compounded by market concerns about valuation and performance guidelines. Currently, its stock price is still far below the peak of more than 270 US dollars in June. Investors are weighing Corning's AI-driven growth opportunities with the potential dilution brought about by the issuance of new shares.
On Stocktwits, retail investors' optimism about Corning cooled, but it was still in a “bullish” range as of Monday.
A trader said on Stocktwits: “Corning has registered an offering of up to $2 billion. According to the filing, they sold to private investors in a bulk transaction. Anyone can buy 12 million shares. Orders of this magnitude require cash flow support. If we want to grow, we need capital. It's that simple.”
Another trader said, “Corning is the best company on the market and is expected to double next year.”
Corning was also boosted by the positive response of Apple's first folding iPhone released last week, with investors betting that strong demand could benefit its advanced glass business. Corning has a long-standing partnership with Apple and is a major supplier of cover glass for iPhones and other Apple devices, and this folding iPhone is expected to use Corning's ultra-thin flexible glass technology.