“White-haired Stock Oracle” Serenity: Marvell’s acquisition of Lumentum is strategically positive, but the fixed exchange ratio limits LITE’s independent pricing space

Odaily reports: “White-haired Stock Oracle” Serenity posted a comment on Marvell’s acquisition of Lumentum, stating that if Lumentum (LITE) had remained independently listed, its stock price would likely have risen after the earnings release, especially considering the company’s previously announced $5 billion CPO/NPO business (unrelated to Nvidia), which may carry margins exceeding 60%, with the Greensboro facility alone potentially generating $5 billion in annual revenue.

Regarding Marvell’s (MRVL) acquisition of Lumentum, Serenity believes the deal is highly beneficial to Marvell’s long-term strategic positioning and will also enhance the value of other independent laser manufacturers. However, Lumentum shareholders still face more than a year of uncertainty before the deal closes, and because the two sides adopted a fixed ratio of 1 LITE share for 4.5 MRVL shares, LITE’s independent price discovery space will be constrained. Serenity also noted that a fixed dollar valuation floor, rather than a fixed exchange ratio, might be more favorable to Lumentum shareholders.

According to MSX.COM data, at the U.S. stock market close, Lumentum (LITE) fell 18.59%, while Marvell fell 12.72%.