Shares of POET Technologies (NASDAQ: POET) fell on Friday, finishing the day down 7.3%. The drop came as the S&P 500 and Nasdaq Composite gained 0.3% and 0.4%, respectively.
The stock has lost roughly 40% since peaking above $20 in mid-May, after nearly tripling from its early month levels. It closed Friday near $12.30.
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Why POET Technologies’ stock dropped again on Friday
There’s no single catalyst for today’s drop; rather, it’s the weight of several problems continuing to compound. Late last month, Marvell’s AI division canceled all purchase orders with the company, sending shares down roughly 47% in a single session.
Then came a $400 million registered direct offering that added about 19 million new shares, along with matching warrants, diluting shareholders.
Image source: Getty Images
And on top of that, multiple securities class actions are now targeting the company over tax misstatements and other allegations.
A mountain of problems keeps growing
And of course, there is the valuation. POET technology stock, even after its 40% decline, trades at a multiple that makes quantum computing stocks look reasonably priced — a price to sales (P/S) ratio of over 1,000.
The technology is promising, but between questionable management decisions and an absurd valuation, I would hold off on POET stock.
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