There are Positives and Negatives I am seeing.
Positive.
1) It's not being paid in cash. This no additional debt abd funding costs.
2) They are both in the essential new tech to provide the connections between chips to run AI compute.
3) When running together, they may win more share of the business from Broadcom. Possible even become the dominant eventually.
Negatives:
1) Share dilution, though the shares being issued to Lumentum holders may be from treasury, thus no new shares issued?
2) Not sure about the equity of 4.5 MRVL shares for each Lumentum share. Is the fair?
All in, my take is it needs more studies and anlysis. But present market reaction is overdone. Probably we will see some rebound later today.
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- bs6969·11-03 21:04UpLikeReport