- Today's news of a deal between Lumentum (LITE +6.9%) and Oclaro (OCLR +27%) has nearly all optical-equipment makers on a roll, though analysts see some scaling challenge ahead for Finisar (NASDAQ:FNSR).
- Applied Optoelectronics (NASDAQ:AAOI) is up 6.5%; NeoPhotonics (NYSE:NPTN) +6.7%; Emcore (NASDAQ:EMKR) +3.2%; Acacia Communications (NASDAQ:ACIA) +6.3%.
- Finisar (FNSR) is +4.5% though the Oclaro deal's a likely negative, says B. Riley FBR, since Finisar was the most likely buyer for Oclaro as it could helped scale up the datacom business.
- And Fabrinet (FN -3.4%) will probably have to make price concessions after a combined Lumentum/Oclaro, analyst Dave Kang says. (h/t Bloomberg)
- Meanwhile, Finisar needs to keep looking, and Applied Opto could be a good target due in part to higher gross margins, D.A. Davidson says. Acacia or NeoPhotonics are also possibilities.
- Now read: Oclaro (OCLR) Presents At Raymond James 39th Annual Institutional Investors Conference - Slideshow
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