Shares of both companies fell Monday after Marvell said it reached an all-stock agreement to buy Lumentum Marek Mscichowski, a day trader who has a small position in Lumentum Holdings, is not a fan of the company’s deal with Marvell Technology. On Monday, Marvell agreed to buy Lumentum in an all-stock transaction worth $115 billion. The deal values Lumentum’s stock at $1,132 a share, according to a press release, representing a premium of approximately 23.9% to the share price as of Oct. 28.
Lumentum’s stock fell by 18.6% on Monday and closed at $684.40 a share, making it the worst-performing stock in the S&P 500 on the day. Shares of Marvell closed down 12.7% and have logged their worst three-day stretch since October 2000. Why humanoid robots are so hard to mass-produce Play video: Why humanoid robots are so hard to mass-produce According to the press release, Lumentum shareholders will receive 4.5 shares of Marvell common stock for each share of Lumentum common stock they own.
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Mscichowski pointed out that the transaction is expected to close in the first half of 2028. Marvell stock could crash in that time,” he noted. The $115 billion implied deal value is based on Marvell’s current share price, but the value of the deal will be lower if the company’s stock remains under pressure.
Nigam Arora, founder of the the Arora Report, said some of the advisory firm’s members who pursue short-term momentum trading strategies have been unloading Lumentum stock. Nobody likes losing money.” Arora also holds a long-term position in Marvell. He said he intends to add to that Marvell position with the goal of “taking advantage of the dip.” There’s a risk that the deal could fall through, Needham analyst Ryan Koontz told MarketWatch, noting that Lumentum’s board “still has some convincing to do” to get shareholders in agreement.
Koontz said that while Lumentum management is making the case that there will be cost savings in the combined business operations involving semiconductors, data infrastructure and optical networking, he described it as a long-shot bet. While chip maker Marvell specializes in networking and switches, Lumentum specializes in fiber optics. **Read more:**Microsoft is winning the cloud wars and becoming Wall Street’s new golden child Victor Silva, a Marvell shareholder who goes by “Canadian Talking Stocks” on X, told MarketWatch that the short-term dilution of shares hurts current Marvell shareholders. Marvell and Lumentum did not respond to MarketWatch’s requests for comment.
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