The mysterious flight of corporate jet N78CY
A Corning-owned Dassault 900 EX corporate jet flew to Roanoke during the evening of November 14th
✈️ The Flight ✈️
Why did Corning-owned Dassault 900 EX corporate jet N78CY fly to Roanoke? Is this MATERIAL PUBLIC information (rather than illegal material non-public information?)
In an article published on Seeking Alpha on October 14, 2019, I argued that OCC’s recent circumstances suggest that the “probability of a sale of OCC to an acquirer has increased.” (But note that those circumstances may have commensurately increased OCC stock’s downside risk as well.)
Two hours and forty minutes on the ground, from 7:00pm to 9:40pm. Enough time for a dinner, a presentation, or a discussion? Corning executives (it is a Corning jet, so maybe passengers included Corning executives?) meeting OCC executives (highly unlikely, but Roanoke is OCC’s headquarters, so maybe?)? Or, did the jet pickup unknown passengers in Roanoke and fly them to Elmira NY (Corning’s local airport).
On Twitter, following the initial publication of this substack post and a companion tweet, @caetuscap pointed out that Corning Inc. has a plant in Christiansburg VA, which is 35 miles from Roanoke’s airport (but only 3 miles from the much smaller Virginia Tech Montgomery Executive Airport). Certainly, Caetus’s point underscores there are a number of possible explanations for N78CY’s stop in Roanoke.
Corning’s Dassault 900 EX corporate jet N78CY activity on November 14th is highlighted below:
✈️ The Fleet ✈️
N78CY is similar to N48CG, another Dassault Falcon 900 EX owned by Corning Inc:
The FAA’s records show Corning Inc. (NYSE: GLW) owns eight corporate jets — five Dassault Falcon 900 EX and three Bombardier CL-600-2B19 (a similar jet). Only the oldest two of the eight are available for public tracking.
For Corning’s newest six jets, the last two letters of the FAA N-Numbers are “CG” — “Corning Glass”, perhaps.
Corning’s Policy on Personal Use of Corporate Aircraft
Corning cogently argues in its recent proxy: “Given the limited commercial flight options available in the Corning, New York area, the Committee believes that a well-managed program of limited personal aircraft use provides an extremely important benefit at a reasonable cost to the Company. (bold added)” That argument seems compelling.
Corning’s proxy outlines “annual personal aircraft usage caps under this program (both hours and absolute dollar value) for each NEO [Named Executive Officer]. The established cap for the CEO was 100 hours and $170,000; the cap for the other NEOs was approximately half this level or lower.” One hundred hours of personal jet usage sounds high, but “Actual utilization falls below these caps.”
But that’s not all. Corning offers seats, when aircraft are not full, to Corning retirees and their immediate families on the Corning Aircraft Shuttle which boasts ten weekly scheduled round trip flights to Morristown NJ (suburban NYC) including free ground transportation to 59th Street in Manhattan.
The Corning Aircraft Shuttle also offers scheduled trips, less frequently, to Charlotte NC (five round trips per week), Lexington KY (three round trips per week), and Wilmington NC (two round trips every other week).
Not Roanoke.
A deep dive into Corning’s personal travel privilege on the Corning Aircraft Shuttle is beyond the scope of this write-up. The main point is that, with eight busy corporate jets, one would expect a Corning corporate jet to stop at many different airports, including KROA:
To an outside observer, a Corning corporate jet stopping at KROA allows NO DEFINITIVE CONCLUSION vis-a-vis acquisition talks between Corning and OCC.
Would Corning Buy a Company as Small as OCC?
Corning has an equity market capitalization of $22 billion. OCC’s equity market cap is $23 million. I can hear the reader saying: “No way would Corning acquire a company one thousandth its size.”
Makes sense. But not really, when you look into Corning’s history.
In December, 2016, Corning announced it had acquired STRAN Technologies, a “U.S.-based producer of harsh environment and tactical interconnect products and services”. While the purchase price was not announced, one can work back from information provided by Corning in various documents and estimate the purchase price for STRAN was $51 million.
OCC’s enterprise value (equity market cap plus debt outstanding) is $35 million. An acquisition premium could take the total cost to $50 million or higher. As is the case with STRAN, OCC boasts a highly regarded harsh environment product line. With respect to both company value and company focus, OCC seems similar to STRAN.
A counter argument: If Corning has six jets that cannot be publicly tracked, why use one that can be tracked if flying to Roanoke to negotiate with OCC?
Who were the passengers on N78CY?
With respect to the flight of N78CY on the night of November 14, 2019, wouldn’t it be interesting to know who flew from Elmira to Roanoke? And did anyone board in Roanoke for the flight back to Elmira?
More than the flights themselves, the identify of the passengers could be material to OCC’s stock price. But,we don’t have that information.
Summary
Could N78CY’s flight to KROA be a tell of acquisition interest on the part of Corning? My conclusion is: Unlikely. But, who knows? It bears watching.
This piece explores possibilities, without making any investment recommendations. In any case, OCC stock is very thin; the stock is dangerous to trade!
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Appendix — Great Quarter’s Seeking Alpha articles @ OCC
Optical Cable Corp.'s Bank May Gain Leverage After OCC Missed 2 Bank Covenants' Requirements Oct. 14, 2019
The Ted Weschler And Neil Wilkin Story: Optical Cable Corporation Jul. 26, 2019
Why Did Ted Weschler Double His Stake In Optical Cable Corporation? Feb. 22, 2019
Ted Weschler Bought Over 5% Of Optical Cable Corporation - Should You Buy Too? Nov. 9, 2018
Why did $BDC owned jet N363AP (operated by http://www.americanaircharter.com/our-fleet/ ) fly from St. Louis MO (Belden HQ) to Roanoke VA ( $OCC HQ) yesterday? Who flew on the jet?
https://flightaware.com/live/flight/N363AP