Harmonic, Inc. (HLIT -2.46%) shares have kicked off Wednesday morning with a bang, jumping 20% as of 11:30 a.m. EDT after the company announced a warrant agreement with cable giant Comcast (CMCSA -2.34%).
The agreement allows Comcast to acquire Harmonic shares dependent upon various performance metrics, such as product sales. Harmonic CEO Patrick Harshman called the deal "significant validation" and showed that Harmonic's existing relationship with Comcast is only getting stronger. Harmonic specializes in video delivery infrastructure and cable delivery.
More specifically, the agreement grants Comcast the ability to purchase up to 7.8 million shares of Harmonic at an exercise price of $4.76, which was the weighted average share price for the past 10 days. The warrants are subject to vesting conditions that are based on pricing elections, completion of field trials, and other payments between the two companies. For instance, Comcast must agree to pay enterprise pricing for Harmonic's CableOS software.