Marvell Technology Shares Plunge After Lumentum Acquisition Deal

Marvell Technology shares dropped 30.2% in one week following a November 2, 2026, agreement to acquire Lumentum in an all-stock transaction. The selloff, driven by investor concerns over share dilution, caused the deal's enterprise value to fall from $115 billion to between $75 billion and $77 billion.

Because the transaction uses a fixed exchange ratio of 4.5 Marvell shares per Lumentum share without a price collar, the stock decline converted an initial 23.9% premium for Lumentum shareholders into a 21.3% discount. Lumentum shares currently trade 12.8% below the offer value, reflecting market skepticism. The companies expect the deal to close in the first half of 2028, pending regulatory reviews and shareholder votes, with potential breakup fees reaching $5.8 billion for Marvell or $2.9 billion for Lumentum.

Despite the stock volatility, Marvell reported strong fiscal Q2 2027 results, including $2.739 billion in revenue and a 46% increase in Data Center revenue. To signal future growth, the company raised its fiscal 2028 revenue outlook to approximately $18 billion and expanded its partnership with Google, which includes a warrant for up to 7% of Marvell's shares. NVIDIA also invested $2 billion in both firms this year. The combined companies project over $1 billion in annual cost savings.