Why Poet Technologies Stock Plummeted This Week
Key Points
Poet stock slumped amid news of the company's $400 million new stock sale.
The company's share price has been highly volatile over the last month.
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Poet Technologies (NASDAQ: POET) stock got hit with a big pullback in this week's trading. The photonics company's share price fell 8.6% compared to where it stood at the end of the previous week's trading. The S&P 500 gained roughly 0.9% over the period, and the Nasdaq Composite climbed roughly 0.5%.
Poet stock pulled back this week in conjunction with news that it had finalized a deal worth roughly $400 million to sell new shares of its stock. Even with a pullback this week, the company's share price is still up 130.5% year to date.
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Poet stock moved lower in response to a new stock deal
Poet published a press release on May 18 announcing that it had completed a new fundraising deal. Through a deal with a single institutional investor, the fiber-optics specialist agreed to sell roughly 19 million shares of new common stock. As part of the deal, the buyer also received a warrant allowing them to purchase roughly 19 million shares of additional common stock at an exercise price of $26.25 per share. The combined price of the common stock sold in the deal and the warrant granting additional purchasing rights worked out to $21 per share.
What's next for Poet?
Poet remains in the early stages of its commercialization ramp, and some big questions remain about what the company's order trajectory looks like over the next several years. While the company has secured an order from Lumilens for $50 million worth of hardware, Poet also provided its customer with a warrant granting them the right to purchase stock at $8.25 per share -- well below its current valuation level even after some significant pullbacks. Poet has seen valuation moves that have seemingly been impacted by the tech specialist's meme stock, and that suggests that shares could continue to be highly volatile in the near term.
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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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