$Lumentum(LITE)$ The CEOs wouldn't have made a deal if they hadn't known ahead of time that Marvell's earnings were going to be excellent. Marvell has better stuff than their competitors.
$Lumentum(LITE)$ The spread has widened from 11.2% at the deal announcement to 15.4% as of June 11. The MRVL/LITE ratio is currently at 3.82, which is the same level it was on October 8. The market values the ratio below 4.5. At the current share price, you can buy MRVL through LITE at $119.61, compared to $141.25 for one MRVL share. LITE and MRVL have both fallen by 48.6% month-to-month, and what stands out even more is the drop from October 28, before the deal, of 42.5%, versus an average decline of 20% for SOXX and Coherent. So roughly half the sector decline and half deal-related. LITE still reported strong results. In my view, this looks like a solid buying opportunity with more than a 15% discount.
$Palantir(PLTR)$ My concern with PLTR has always been the PE. But if they can keep bringing the PE in line, there's a real chance this turns into a great company story.
$Lumentum(LITE)$ I took a different approach from what was discussed earlier. Instead of rolling MRVL shares into LITE, I sold my LITE position at a loss and bought MRVL. That also gives me a tax loss to work with, and based on the latest price action, it looks like a reasonable move. There is still a long time until the deal closes, and both LITE and MRVL can be traded in the meantime. The divergence between them should become clearer next month. If the spread is still at a similar level then, I may consider getting back into LITE. The related trades are connected, and even with the hit taken this week, the more due diligence I do, the better the combined company looks.
$Palantir(PLTR)$ The easy money has already been made, but now the real money gets made. First buy-in is at $100, and that looks like a short-term support level.
$Lumentum(LITE)$ I really don't like how the deal was structured, or the timing of it. That said, I don't think MRVL and LITE are going to sit in limbo for 18 months with both stock prices just floating where they are or lower. Once this AI and tech sector correction passes, why wouldn't both of them move higher? It's been a rough couple of days, but I'm thinking a bit more clearly about it now. The declines weren't driven by anything business related at either company.
$Palantir(PLTR)$ For whatever reason, this day really tired me out. Palantir is going to be just fine though. Awesome company. Congrats to those who bought at the early lows.