Why NVTS Stock Is Extending Its Breakout Rally From Last Week

• Navitas has settled with Live Oak and issued shares based on stock-price milestones under their 2021 merger agreement, resolving allocation disputes that emerged last month.
• Navitas said it issued about 3.28 million shares of Class A common stock to former shareholders.
• Stocktwits sentiment for NVTS improved since Friday and was ‘bullish’ on Monday.

Navitas Semiconductor Corp. shares gained 6% in overnight trading ahead of Tuesday’s session, extending a sharp rally from the previous week that was fueled by the company resolving a dispute with its SPAC sponsor, Live Oak Acquisition Corp. II.

NVTS’s Power Chip Optimism Drives Sharp Gains 

Navitas stock added 37% last week, taking its year-to-date gains to 310%. Investors have piled into the stock, encouraged by the company’s gallium nitride (GaN) and silicon carbide (SiC) semiconductors, which improve power conversion efficiency across data centers, electric vehicles, renewable energy, and industrial systems. Many see the advanced chips and power solutions as well positioned to benefit from growing AI infrastructure and energy-market demand, where the need for efficient power solutions is rising rapidly.

NVTS-Live Oak Settlement

On May 18, Navitas announced a settlement agreement with Live Oak related to stock rewards tied to the company’s 2021 merger deal. Under the agreement, about 726,000 shares that were previously subject to performance conditions will now fully belong to Live Oak Sponsor, while nearly 116,000 shares will be forfeited. The deal also included both sides agreeing to drop any related legal claims.

The dispute centered on whether Navitas had met certain stock-price targets tied to its SPAC merger, which would trigger the vesting of earnout shares owed to Live Oak. Last month, Live Oak argued that the first trigger event had been achieved and that a portion of the shares should immediately vest and become transferable, while Navitas initially disputed that claim and denied any breach of the agreement. 

Additional disagreements later emerged over whether later stock-price milestones had also been reached. The two sides ultimately settled the matter to avoid prolonged legal and financial uncertainty, with Navitas agreeing to release some shares, Live Oak forfeiting others, and both parties dropping related claims.

On Friday, Navitas said it issued about 3.28 million shares of Class A common stock after reaching a stock-price milestone under its agreement with Live Oak. The shares were distributed to former Navitas shareholders and certain other parties specified in the agreement, the company said.

Retail, Analyst View On NVTS 

On Stocktwits, the retail sentiment for NVTS has been climbing since Friday and was ‘bullish’ as of late Monday, with the ticker trending among the top five on the platform. Still, some traders said the stock appeared overpriced. 

“$NVTS I like this company, i really do. but at this price looks pretty extended,” said a trader. Another wrote: “$NVTS fundamentals aren't great but nice chart here.”

To be sure, Navitas reported revenues under $10 million in the last two quarters. It is still developing and testing several next-generation products, including 100V and 650V GaN solutions and ultra-high-voltage 2300V and 3300V SiC chips for the data center segment, many of which are currently in customer sampling, qualification, or evaluation stages.

Currently, five of the eight analysts covering the stock have a ‘Hold’ rating, two rate it ‘Buy’ or higher, and one rates it ‘Sell,’ according to Koyfin. Their average price target of $14.46 is 50% below NVTS’ last close.

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