TV Remote Control Maker Surges On Deal With Comcast
Universal Electronics Inc. ( UEIC ), a maker of remote controls, has seen its stock soar since it announced a deal Wednesday with cable TV giant Comcast ( CMCSA ). UEI stock rose 1.5% to 65.20 on Friday, just below its all-time high of 66.75 reached on Feb. 17, 2015. UEI shares jumped 4.2% on Wednesday and 11.1% on Thursday. On Wednesday, UEI announced a warrants agreement with Comcast as an extension of its partnership to develop advanced technology products with Comcast Cable Communications Management. “This agreement represents a major milestone in our history,” UEI Chief Executive Paul Arling said in a statement . “We are privileged to have helped Comcast’s X1 redefine the entertainment viewing experience, and we are now positioned to provide innovative products across Xfinity Home as well.” The new agreement follows a development and supply collaboration renewed this year, in which UEI supplies the voice remote as part of Comcast’s X1 Entertainment Operating System. Comcast now has the opportunity to acquire shares of capital stock from UEI tied to the potential fulfillment of pre-defined purchase milestones under the terms of the warrants agreement. Comcast could end up buying up to 725,000 shares of UEI over six years. Comcast’s right to exercise the stock purchase warrant is subject to vesting during three successive two-year periods during which Comcast must purchase, in each two-year period, no less than $260 million in goods and services from UEI. To vest in all of the warrant shares, Comcast must purchase an aggregate of $1.02 billion in goods and services from UEI during the six-year vesting period. UEIC carries a high IBD Composite Rating of 97, but its stock is now extended out of buy range. Comcast has an 86 Composite Rating, and is below a buy point. Comcast stock rose 1.4% to 59.16 Friday. RELATED: Comcast Bets On ‘Magical’ Voice Remote Controls