Marvell Technology Inc. (NASDAQ:MRVL) stock edged higher in premarket trading Tuesday as investors assessed fresh concerns over its proposed $115 billion acquisition of Lumentum Holdings Inc. (NASDAQ:LITE).
Merger arbitrage specialists estimate the deal has roughly a 50% chance of closing, Bloomberg reported Tuesday.
$115 Billion AI Deal Faces Growing Skepticism
Marvell shares have fallen nearly 40% since reports of the potential acquisition emerged in late October. Meanwhile, Lumentum has lost about 35%.
As of Monday, Lumentum shares traded at a 14% discount to the value of Marvell’s all-stock offer.
The widening gap reflects concerns over the deal’s valuation, regulatory hurdles and lengthy closing timeline.
The transaction, expected to close in 2028, would combine Marvell’s signal-processing technology and optical modules with Lumentum’s lasers and other optical components.
However, investors remain concerned about the sustainability of artificial intelligence infrastructure spending.
Jennifer Rie, senior litigation analyst at Bloomberg Intelligence, identified China’s regulatory review as a major risk to the deal’s timing.
Still, Rosenblatt analysts highlighted Marvell’s previous acquisitions of Cavium and Inphi, which secured Chinese regulatory approvals within eight and five months, respectively.
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Marvell Stock Faces Technical Pressure
Marvell shares remain below key moving averages despite Tuesday’s modest premarket gain.
The stock trades 27.2% below its 20-day simple moving average (SMA) of $211.68 and 33.9% below its 50-day SMA of $233.06.
It also sits 16.9% below its 200-day SMA of $185.42, signaling continued selling pressure.
The moving average convergence divergence (MACD) indicator remains below its signal line, suggesting weak bullish momentum.
Traders are watching resistance near $171 and support around $147.
Meanwhile, Marvell’s next earnings report is scheduled for Dec. 1. Analysts expect earnings of $1.09 per share on revenue of $3.14 billion.
MRVL Price Action
Marvell shares rose 0.38% to $155.18 in Tuesday’s premarket trading, according to Benzinga Pro data.
Photo via Shutterstock
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