POET Stock Retail Bulls Hold Firm After Marvell Cancels Orders: ‘Not A Scam Company’

• POET shares declined a record 47% on Monday, after the company’s disclosure.
• Traders on Stocktwits argued the debacle did not reflect poorly on the company’s business or the strong demand for photonic data transmission technology.
• Stocktwits sentiment for POET remained ‘extremely bullish.’

POET Technologies’ stock plunged nearly 50% on Monday and fell further in after-hours trading after the company disclosed that Celestial AI and its owner, Marvell Technology, had canceled orders following a breach of confidentiality. Still, retail investors tracking POET on Stocktwits largely held their ground. 

Traders argued the debacle did not reflect poorly on the company’s business or the strong demand for photonic data transmission technology, speculating that the cancellation could be reversed and that future orders may still materialize.

“They (Marvell/Celestial AI) didn’t cancel because the company is a ‘scam’... The purchase orders will likely be reinstated on a confidential basis,” a trader said. Another wrote: “The technology is still amazing and has absolutely massive potential. Remember millionaires are made during drawdowns. Let the dust settle and let’s see how it plays out.”

On Stocktwits, the retail sentiment for POET dipped from the previous day but held firmly in the ‘extremely bullish’ zone as of late Monday. Message volume for the ticker over the last 24 hours rose by 2,451%, signaling strong interest in the stock and developments surrounding the company.
 

POET’s Marvell Controversy

On Monday, POET announced, “the cancellation of all purchase orders received by the Company from Celestial AI, including the ones for initial production units first disclosed (the ‘Purchase Orders’) by the Company in a press release on April 25, 2023.”

Marvell, which acquired Celestial AI, provided written notice of the cancellation on Thursday, citing “disclosures of information related to the Purchase Order and shipping information in contravention of its confidentiality obligations,” according to POET’s statement.

The development follows POET Chief Financial Officer Thomas Mika’s interview with Stocktwits last week, in which the executive disclosed that the company had received a purchase order linked to Marvell and was in discussions for new ones from Foxconn and Luxshare.

POET’s Monday statement did not detail the nature of the breach of confidentiality in question. “The Company remains focused on executing its strategic priorities and advancing product development within the AI and optical networking markets to meet increasing demand,” the statement read.

POET Traders Shrugg Off Record Stock Drop 

Traders appeared to largely shrug off POET’s record drop. While some called for management accountability, others argued that Marvell’s ties to POET were already evident following its acquisition of Celestial AI – and that Marvell may have used Mika’s comment as a pretext to cut ties, especially as it builds its own photonics technology in-house.

“Someone please correct me if I may be wrong here. $POET had a deal with Celestial. Marvell acquired Celestial with the POET deal already in place. Marvell wanted to do optical in-house and bought their own optical company. Marvell didn't necessarily want the revenue going to POET when they could just keep all the dough for themselves,” a Stocktwits user posted.

“Mika gave Marvell a lame, BS, manufactured excuse to back out of the contract and they took it.  I smell a lawsuit coming with Marvell as the defendant. Maybe I'm nuts,” they said.

Another trader dismissed the controversy altogether, saying that bigger orders might be in the pipeline. “The marvel connection were the obvious dot, the real connections have yet to be revealed to the mainstream public,” they said.

POET stock has drawn incredible interest in the last few months amid the rapid data-center buildout and speculation that Nvidia and other chip majors may tap its photonics technology. Despite Monday’s drop, POET shares are up 26% year to date.

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