$LITE · Jose Najarro Stocks · 2026-11-03

If you are an investor in Marvell or Lumintum today, you are probably wondering : What is happening in the world of chips? Marvell recently announced its acquisition of Lumintum by paying a premium, yet the stock of both companies has declined.

The market is wondering what the hell is going on. If you are performing so well, why are you selling your optics business ?

Who will get what? If you are a shareholder in " Lumentum", this will be an all-stock deal . 4.5 shares of Marvel for every share of Lumintum. So, if you own one share of "Lumentum", you will get 4.5 shares of "Marvel".

Ownership will be distributed so that Marvel will own approximately 67% of the new company's shares , while Lumintum will own 33%. The price premium is based on the reference date.

For example, on October 28, Marvel was valued at $251. Multiplying that by 4.5, we get approximately $1100 as the price per share. At that moment, Litecoin's stock was trading at $913.

This means that the bonus was approximately 24%.

For me, if the ratio gets close to one to one, I think that would be great. Let's assume that the price multiplied by 4.5 will give you the same price as Lite. I think this is really attractive to Marvel investors.

Lumintom offers lasers, indium phosphide fabrication, optical transceivers, and optical circuit switches (OCS). Management argues that a more accurate common design can help with the transition of optical communications to vertical expansion networks and eventually to internal expansion structures.

Now, why sell Lumintum if it's growing so fast? Fortunately, during today's conference call, one of the analysts posed this question directly: "If Lumintum is growing at over 100%, why sell now?

If you are selling now, is it because you believe the end of the market or the end of the hype is very near? If so, is that the reason you are selling your company?"

But Michael, the CEO of Lumentum, said the business was still strong and that he had not seen a change in its trajectory. His explanation was that Marvell gives Lumentum access to shared semiconductor design, co-marketing, and superband relationships that can expand its access to vertical and internal expansion opportunities .

Later, he said that Lumentum was considering remaining independent and acquiring the semiconductor business. Regardless, management ended up preferring a merger with Marvel, even though it meant giving up control.

To me, this tells me that management believes this is the right move.

Is this really the true answer? We don't know. you tell me. If you follow Lumintom , and if you know the CEO, is he extremely trustworthy? Does he usually say things as they are?

Now, if we look, Lumintum has announced much larger quarterly revenues for the first quarter of fiscal year 2027, up 136.5% year over year to about $1.26 billion. Revenue growth was approximately 25.5% on a quarterly basis.

So, it is still experiencing this strong quarter. Non-GAAP operating margins settled at around 42.3%. And now, they have also provided some kind of guidance for the next quarter.

They expect to generate around $1.6 billion in the middle of the range, with non-GAAP operating margins of 45 to 46%, and about $6 in earnings per share. Now, the second quarter will also represent revenue growth of at least 20% on a quarterly basis. So, the market is still poised for momentum .

Unfortunately, the stocks have fallen as we saw earlier today. Marvell's stock fell by about 12.7% from Friday, while Lumentum's stock fell by about 18.6%.

However, regardless of that , now that Marvel and Lumintum stocks are linked, a drop in Marvel's stock price creates negative pressure on Lumintum . Therefore, a fixed exchange ratio creates a clear mechanical link between the stock price and the current value.

Are both companies overpaying and are their market values too high? I don't think that's the case now. In my opinion, both companies are at attractive levels, but it's one of the concerns affecting the market.

The other issue for Lumentum shareholders is whether owning a larger part of the company would provide a better outcome than the independent route. Personally, I think I am happier as a Marvel contributor than as a Lumintum contributor.

I think that as a shareholder in " Lumentum", I probably wouldn't have had access to every part of the semiconductor package, but I believe the opportunity was available to them.

The other thing is that implementation is expected to be completed in 2028. We still have a year and a half from now. I think this might be a good time if one is interested in Lumentum and believes that the acquisition will not happen.

This could be a buying opportunity, but it might take some time, wouldn't it? Now, we may not get the final answer for a few quarters from now. Will one be able to manage and endure this kind of fluctuation?