Key Points
Poet announced today that it had closed a deal raising $400 million through the sale of new stock and a warrant.
Bearish momentum for the broader market also weighed on the stock today.
Poet has been selling a lot of new stock to raise funds lately.
Poet Technologies(NASDAQ: POET) stock got hit with another round of big sell-offs in Monday's trading. The fiber-optics specialist's share price declined 11% in a session that saw the S&P 500 decline 0.1% and the Nasdaq Composite decline 0.6%.
In response to rising bond yields, another jump in oil prices, and concerns about the growth outlook in the memory-chip market, investors broadly sold out of tech stocks today.On a company-specific level, Poet also announced that it had completed a deal to raise $400 million through the sale of new stock and warrants. While the deal will provide the company with a substantial new capital injection, it will also have a dilutive impact for shareholders.
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With today's pullback, virtually all of the valuation gains that Poet saw following the announcement of its deal worth up to $500 million with Lumilens have now been wiped out. On the other hand, the stock is still up approximately 125% across 2026's trading.
Is Poet stock a buy right now?
Poet stock has been incredibly volatile this year, but investors who bought at the beginning of the year and held on to their shares are still up massively.While it's certainly possible that the stock could bounce back from its recent pullbacks and go on to set new 52-week highs, shares continue to look very risky.
For starters, Poet seems to have benefited from meme-stock momentum that has helped inflate the company's share price. With its share price more than doubling this year, management has moved to aggressively raise funds through the sale of new stock.
While news that Marvell had canceled an order with Poet briefly halted the company's upward bullish momentum, the tech specialist quickly followed up news of the setback with an announcement it had secured a deal with Lumilens that could be worth more than $500 million -- but there's a lot of uncertainty surrounding the deal.
With the initial order amount coming in at $50 million and the deal granting Lumilens warrants to purchase roughly $22.9 million shares at a price of $8.25 per share, the contract may prove to be far less significant than the banner numbers indicate.With the company turning around and selling common shares and the stock warrant with in exercise price of $26.25 at a combined price of $21 per share, the recent financing moves and uncertain product pipeline make the stock a no-go for me right now.
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 positions in and recommends Marvell Technology. The Motley Fool has a disclosure policy.
