I think the reason for not having a tender offer is related to both cash flow and location of the cash. The two tiers Display and Optical are the drivers of the overall business. Display is offshore as represented by the yen hedge. Optical is more North America with locations in NC and Mexico. The tender would require stateside cash all at once. This was all prior to DCJV deal. That could change once DCJV closes and significant amount of cash is in US (albeit of balance sheet).
On a side note. I think this is the issue that AFOP is having as well. They lost significant revenue from a big customer (rumor is Google). They have operations in Taiwan for Asian market. If the overall business was 70/30 or 60/40 US/Asia then it appears to have inverted with loss of big US customer. Now the business appears to be70/30 or 60/40 Asia/US. The company still has fixed costs PP&E and SG&A based in US that needs cash. They could get another US customer or customers but that means more cash for additional sales force and cash to keep their key people in the PP&E etc. Chang has not tapped debt for funding which I suspect is because any debt means a certain amount of control is now in creditors or bankers hands.
That's just my take.
ok, that makes me feel better, but not great. That price is still higher than we are now so they destroyed capital
Rather than buy in dribs and drabs, why not just a big tender offer?
There were 1,112,837,205 shares of Corning’s common stock issued and outstanding as of January 31, 2016.
On January 19, 2016, the 2015 ASR agreement was completed. Corning received an additional 15.9 million shares on January 22, 2016 to settle the 2015 ASR agreement. In total, Corning purchased 69 million shares
The shares above settled in Jan '16 prior to the official share count dated 1/31. It's a bit of a technicality but the 15.9 million shares listed were in brokers possession but actual title didn't transfer until after 12/31. They need to be recognized as being in "escrow" if you will. Title transferred prior to 1/31/16 official share count. So the technicality is they can't claim an actual 2015 purchase (title in hand) but need to report for disclose and transparency. This would make 2015 buyback $3.25 billion / 167 million shares or $19.46 a share.
Guys. What happens when vehicle design incorporates the glass more with body panels.? Its going to happen in the near future on the new vehicle designs. Imagine turning a button and changing vehicle color?
Most definitely it's feasible. I don't see it being added as an option and replacement windows for currently older cars is less likely as well.
It goes to the heart of benefits. We look at it as durable windshield and less prone to cracks or breaks which is a benefit. The real benefit is centered on increased mpg by dropping the vehicle weight and/or reducing the drag. This has to be done while maintaining current benefits or standards such as crash test rating, visibility safety, noise reduction inside car etc.
The reason it can't be piece mealed (option or replacement) is GLW would lose efficiency of plant utilization. They have to run large orders at high run rate. Once it's spec'd into the vehicle they'll run extra to deliver to national replacement companies but they can't run a plant making 300,000 windshields for 100 different vehicles the cost would kill them.
With respect to the cost of GG on new vehicle it would only add $200 or so the sticker as a standard part. Also, keep in mind the higher end market BMW, Mercedes, Audi they'll be able to pass costs on and they have a higher lease rate than other vehicles. The higher lease rate is important as they assume ownership of vehicle after 3 year lease (typically). They want the car back as is without aftermarket parts (accident) with less time inspecting. It would only take 10 min. to wash and back on show floor stamped Certified Used BMW.
I can't tell. Do you think it is feasible?
A couple of the low cost options on our new Mercedes was 1) Burmester sound system $850, 2) Heated seats $580 and 3) heated steering wheel $250. Most of our other options were much more expensive.If I had to pay an extra $1000 for a permanent windshield, I would have added that options.I guess we will have to wait and see how it plays out.If I had more confidence in the GLW management team, I would be more excited.
The best I can tell cost for GG smartphone is about $3 a phone. The iphone 6 has 9.43 sq", and the iphone 6+ is 12.93 sq". So the cost is between $.23 sq" to $.32 sq"depending on market mix of phone sizes. It's hard to tell if $3 cost is for the larger phones or conventional sized phones. In any event, the sedan GG windshield would be $518/2016 sq " or roughly $.256 sq " cost. This would mean the discounts are not extravagant and gross margin would remain viable. They can't afford to steeply discount auto GG otherwise smartphone mfg. would be looking for discounts and the whole value proposition for Gorilla is lost.
Below is from Autonews article Aug. 29 2015.
"Corsi is skeptical that the weight savings will be worth the extra cost. He says a typical windshield costs $20 and weighs 20 pounds.
Harshbarger estimates that Gorilla Glass will reduce weight by 25 to 30 percent, or 5 to 6 pounds. Corning says Gorilla Glass will cost $2-$4 for every pound of weight saved, putting the price premium between $10 and $24 for a windshield."
I believe the cost reference is based on square ft. Best I can figure a typical sedan (Accord, Camry, Altima) has about 14 sq ' for front windshield. That would make conventional tempered windshield about $280 for the OEM. Replacement market would be keystoned and add local taxes making it $280x2= $560 + $56 tax=$616 or ballpark of replacement glass of $600-$800.
The GG windshield has price premium of $10-$24 per square ft. So, if it is on avg $17 premium then cost would be $37/sq ft. This would place the 14 sq ft windshields cost to OEM at $518 and replacement closer to $1000 price tag.
fata good post. These are the kind of metrics Buffett looks for long term innovative company with solid growth potential. Be nice to see the Wizard of Omaha take a bite.
I think the glass would be more expensive but not a deal breaker.We just bought a 2016 Mercedes and I cannot even begin to tell you the advanced features that it has.Upscale cars like Mercedes, BMW Land Rover and other's will implement this improvement.Even if they offer it as an option, most buyer's order significant options at the time of purchase;I did