Poet Technologies Sank Today -- Is The Stock a Buy Right Now?
Key Points
Poet stock pulled back following yesterday's massive rally.
The stock moved lower in conjunction with the company's Q1 earnings results, new financing move, and bearish momentum for tech stocks today.
Poet stock looks risky after surging more than 150% this year.
- 10 stocks we like better than Poet Technologies ›
After surging roughly 43% in yesterday's trading, Poet Technologies (NASDAQ: POET) stock got hit with a big pullback on Friday. The company's share price fell 22.4% in a day of trading that saw the S&P 500 decline 1.3% and the Nasdaq Composite decline 1.6%.
In addition to bearish trading for the broader market adding to selling pressures today, Poet stock saw sell-offs in conjunction with its first-quarter report and news of a new fundraising move. Despite today's big valuation contraction, the company's share price is still up 153% in 2026.
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Poet posted a loss of $0.08 per share on revenue of roughly $0.5 million in the first quarter. For comparison, the average analyst estimate had called for the business to record a loss of $0.05 on sales of $0.25 million. With the business still in an early stage of scaling, fresh fundraising news may have played a bigger role in the stock's pullback today than the Q1 results. Poet has signed a deal to raise roughly $400 million in new funding through the sale of 19.05 million shares of common stock and warrants for the sale of an additional 19.05 million shares.
Is Poet stock a buy right now?
Poet stock soared yesterday on news that the company had entered into a deal with Lumilens that could be worth more than $500 million. While a $50 million order from Lumilens has already been secured, I think there are reasons to take a cautious approach to the long-term impact of the deal.
Along with the initial hardware purchase order, Lumilens also secured the right to purchase 22.92 million common shares of Poet stock at a price of $8.25 over a nine-year period. Even prior to the stock's big pop yesterday, the $8.25 buy price represented a substantial discount compared to Poet's trading price. While establishing investment partnerships with influential players can be a valuable thing for tech companies at early commercialization stages, I think the stock warrants attached to the Lumilens deal raise some red flags -- and the fundraising moves announced today add to those concerns.
Should you buy stock in Poet Technologies right now?
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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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