Key Highlights
- Shares of POET Technologies plummeted more than 44% Monday following Marvell’s termination of all Celestial AI-related purchase orders
- The cancellation stemmed from alleged violations of confidentiality agreements by POET’s leadership
- POET’s Chief Financial Officer disclosed sensitive order information during a public interview, prompting the breach allegation
- Shares had jumped 76% in the week leading up to the cancellation announcement
- The company maintains it still holds a $5 million order with another tech partner
Shares of POET Technologies experienced a dramatic decline Monday following the termination of all outstanding purchase orders by Marvell Semiconductor through its Celestial AI division.
On April 23, Marvell delivered formal written notification terminating the orders. The semiconductor giant pointed to unauthorized disclosures of sensitive information regarding purchase orders and shipment schedules as justification for the decision.
The controversy originated when POET’s Chief Financial Officer publicly discussed the Marvell contract during a media interview. According to Marvell, this disclosure represented a clear violation of the confidentiality terms governing their business relationship.
The terminated agreements covered initial production units that POET had originally publicized in April 2023.
The announcement’s timing proved particularly damaging. In the week preceding the cancellation news, POET’s share price had climbed approximately 76%, approaching its 52-week peak of $15.50.
The previous week witnessed extreme volatility in the stock. Following the initial order announcement, shares rallied significantly. They then plunged sharply during the subsequent session as traders locked in profits, before rebounding Friday to end the week with gains.
Monday’s selloff wiped out most of those advances. The stock tumbled 44.37% during the session, with trading volume reaching approximately 94 million shares—dramatically exceeding the three-month average daily volume of 10.52 million.
Company Highlights Alternative Revenue Streams
Notwithstanding the cancellation, POET directed attention to its remaining business commitments. Management confirmed an existing purchase order worth roughly $5 million with a different technology partner.
The company stated it “remains focused on executing its strategic priorities and advancing product development within the AI and optical networking markets to meet increasing demand.”
Despite Monday’s sharp selloff, POET shares remained positive for 2024, up 27.8% year-to-date, and maintained gains of approximately 250% over the trailing twelve months.
Short-focused research firm Wolfpack Research has recently targeted the company. The firm revealed an active short position and highlighted potential tax compliance concerns affecting U.S. investors. Wolfpack has also questioned POET’s frequent strategic shifts and characterized the operation as a “stock promotion.”
Existing Strategic Partnerships Remain Active
Several key partnerships remain intact. POET recently unveiled a collaboration with Lessengers focused on developing a 1.6T optical transceiver module designed for AI computing clusters and hyperscale data center infrastructure.
This partnership leverages POET’s Optical Interposer platform combined with Lessengers’ Direct Optical Wiring technology.
Additionally, POET has established an agreement with LITEON Technology to jointly develop optical communication modules targeting AI networks and data center applications. This collaboration emphasizes integrating optical components with electronics utilizing POET’s interposer platform.
Marvell’s shares also declined during the session, falling 5.77%.
POET management emphasized its commitment to fulfilling obligations to its existing customer base.
