POET Technologies: Citadel's Entry Collides with a 65% Rout and Class-Action Overhang

POET Technologies faces conflicting signals: a Citadel stake versus a 65% stock collapse, canceled Marvell orders, and class-action lawsuits over disclosures.

The Canadian photonics developer POET Technologies finds itself pulled in opposite directions. On one side, a major hedge fund has taken a sizable stake; on the other, the stock has lost nearly two-thirds of its value since May, and a growing legal threat hangs over the company's disclosures.

Shares finished Friday at €6.52, down 10.44% for the week and 37.67% over the past month. The closing price sits just 4.97% below the 200-day moving average of €6.86 — a level that has failed to halt the decline. At its peak in mid-May, after a brief euphoric rally, the stock hit €18.84, meaning current holders are nursing a 65% loss from that high.

A Hedge Fund Steps In

On July 8, Citadel Advisors disclosed a passive stake of between 5.1% and 5.9% in POET, representing a block of 8.79 million to 10.11 million shares. For a company with a market capitalization of roughly €417 million, that is a material expression of institutional interest — and a sharp contrast to the broader market's skepticism.

Elsewhere on the ownership side, retail investors on platforms like Moomoo have pointed to hiring activity at two Malaysian manufacturing partners, Globetronics and Nationgates, as a potential signal that production is about to ramp up.

How the Rally Unraveled

The current slide traces directly to an event in late April. POET's chief financial officer, Thomas Mika, confirmed a purchase order from Marvell Technology related to Celestial AI, a startup Marvell had acquired. Mika pegged the expected orders for 2026 at "well over" $5 million, triggering a 40% surge in two days and turning sentiment on Stocktwits "extremely bullish."

But on April 27, barely a week later, Marvell cancelled all Celestial AI orders, citing a breach of confidentiality agreements. The pipeline that had underpinned the spring rally vanished overnight, and the stock has been retreating ever since. The cancellation also set off legal action: multiple law firms are now gathering plaintiffs for class-action suits, with one investigation centered on whether POET misled investors about its status as a passive foreign investment company.

Revenue and Cash in Sharp Contrast

The company's operating reality remains far removed from its long-term ambitions. In the most recent quarter, POET generated just over $0.5 million in revenue; on a trailing twelve-month basis, revenue totals roughly $1.07 million. While gross margins are close to 100%, operating losses are deep. EBITDA came in at negative $11.4 million for the quarter, and the net loss reached $12.3 million, or $0.08 per share.

On the balance sheet, however, POET is anything but distressed. It holds more than $429 million in cash and short-term investments, with virtually no debt. That war chest was built through capital raises totaling $830 million over the past twelve months. In parallel, the company announced a $400 million investment to expand its manufacturing infrastructure for photonic AI interconnects, including wafer production and optical module assembly, in partnership with Lumilens. Whether that spending can be redirected or accelerated after the Marvell blow remains unclear.

Short Sellers Are Not Panicking

Despite the slide, short sellers are staying put. As of June 30, short interest stood at 27.09 million shares, or 17.73% of the float — only marginally below the prior month. At current trading volumes, covering those positions would take roughly 1.4 days, indicating that bearish bets are concentrated but not being rushed to unwind.

The broader semiconductor sector has added to the pressure. The release of Moonshot AI's Kimi K3 model in mid-July triggered a global sell-off in chip stocks, with the Nasdaq falling 2.9% in a week and the Philadelphia Semiconductor Index entering bear-market territory. POET, which was already fragile, absorbed an extra hit from the sectorwide rout.

The Production Milestone That Matters

Management is pointing to the second half of 2026 as the moment when optics production is supposed to begin in earnest. By the end of 2027, POET aims to reach capacity of one million optical modules per month. The company cites more than ten active customer projects that, collectively, it expects to generate over $100 million in annual revenue — a nearly hundredfold leap from current levels.

Partners Foxconn and Luxshare have been mentioned as potential sources of new orders, but no firm commitments have been disclosed. The relative strength index (RSI) for the stock sits at 36, skirting the oversold threshold but not yet crossing it. Whether the confidence shown by Citadel can outweigh the legal overhang, the evaporated Marvell pipeline, and the enormous gap between current revenue and future targets will likely hinge on whether those Malaysia-based production lines actually start humming in the second half of 2026.