Marvell Shares Drop 13% on Report of Potential Lumentum Acquisition

Marvell Technology (MRVL) shares fell 13.2% Thursday as investors weighed the financial impact of a possible acquisition of optical networking equipment maker Lumentum (LITE), Bloomberg reported Wednesday, with a deal potentially announced as soon as next week. Lumentum shares rose 0.6%. Lumentum's market value of about $85 billion compares with Marvell's $194 billion. Wolfe Research analyst Chris Caso said Marvell's $3.9 billion cash balance likely forces an all-stock structure. Stifel's Tore Svanberg said such a deal would dilute shareholders near term, though long-term cost savings could benefit investors. Svanberg said investor "panic" reflects the transaction's scale and required approvals from Chinese and U.S. regulators, with China's review potentially lengthy. Seaport's Jay Goldberg said expectations that Marvell must pay a steep premium alone are pressuring the stock. Evercore ISI's Amit Daryanani said clients question why Lumentum would sell with orders booked through fiscal 2029. RBC analysts said the combination is strategically sound given complementary portfolios, but noted Lumentum is a key Marvell DSP customer that could shift orders elsewhere, affecting Marvell's 60% to 65% market share.