Please ensure Javascript is enabled for purposes of website accessibility

Why Universal Display Corporation Stock Dropped Today

By Steve Symington – Jan 15, 2016 at 4:38PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The OLED specialist fell along with the broader market. Here's what investors need to know.

What: Shares of Universal Display Corporation (OLED -0.93%) plunged as much as 11.4% early Friday before closing down 9.6% as the broader market pulled back, even despite a positive patent-related announcement by the OLED specialist.

So what: When all was said and done, Universal Display's movement came not from company-specific news, but largely followed the NASDAQ Composite Index today, which dropped as much as 4.2% by Friday afternoon, then closed down around 2.7%. For perspective, keep in mind that Universal Display stock is still up 55% over the past year on the heels of its better-than-expected quarterly report in November, so it's relatively unsurprising to see this highflier get dragged down more than most.

But this drop might come as a surprise considering that yesterday evening, Universal Display announced it was granted its 2,000th patent, this time covering what it describes as a "new family of 'Phosphorescent Emitters.'"

Universal Display CEO Steven Abramson elaborated:

As a company, we are constantly driving invention at both the architectural and molecular levels. We believe these efforts are expanding and extending the lifetime of our core competencies well into the foreseeable future, while further strengthening our position as a key partner in the OLED ecosystem.

Now what: Of course, this patent isn't particularly exciting given Universal Display's already-massive trove of intellectual property. But for perspective, remember that shares of Universal Display also temporarily plunged a few weeks ago after a short-seller released a troubling report that argued the company was facing a patent cliff since early IP was set to expire in 2017.

I already argued that report was wildly off base, but perhaps this was Universal Display management's way of reminding investors of the relative strength and long-term nature of the company's patent portfolio.

As it stands, I think investors should be focusing first on Universal Display's upcoming quarterly report early next month, which should provide fresh perspective on its many growth opportunities going forward.

Steve Symington owns shares of Universal Display. The Motley Fool owns shares of and recommends Universal Display. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Universal Display Stock Quote
Universal Display
$109.71 (-0.93%) $-1.03

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 11/27/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.