Marvell CEO Matt Murphy sent a companywide email to employees after the chipmaker’s stock fell roughly 51% in a month following its agreement to acquire optical components maker Lumentum. In the message, titled “Putting the Week in Perspective,” Murphy wrote that the drop was “closely in line with the 49% average decline among our connectivity peers” and pointed out that Marvell shares remain up about 66% year to date. He attributed the broader AI stock selloff to investor uncertainty over the duration of the AI infrastructure investment cycle and midterm election scrutiny of data center expansion, while telling staff that early analyst and media commentary misunderstood the deal’s rationale and that major shareholders he met in Boston and New York supported combining silicon and optics.
Lumentum CEO Michael Hurlston separately defended the decision to accept an uncollared, all stock offer after Lumentum shares tumbled more than 45% from their pre-deal levels. “The timing was bad,” Hurlston said, adding that Lumentum’s board “never considered anything but taking all stock” after reviewing Marvell’s books and design wins because of the buyer’s upside potential. He said customer orders stood in stark contrast to the equity rout: “There’s a massive disconnect between what we’re seeing in our demand book and what the markets are showing. Our demand couldn’t be stronger.”
The merger, originally valued at an enterprise value of $115 billion when announced Nov 2, exchanges 4.5 Marvell shares for each Lumentum share and has received a lukewarm early verdict from merger arbitrage investors. The companies remain independent until the transaction closes, which is targeted for the first half of 2028. Hurlston warned that completing the deal is “going to be a bumpy one” and cited regulatory approval as the largest remaining hurdle.
