Acacia Communications, Inc. (NASDAQ: ACIA)
Right out of the gate this morning, Acacia Communications has had a rough time in the market. While there hasn’t been any fundamental news released surrounding the stock specifically, there is a good reason for the decline. Today, we’ll talk about what we’re seeing from the stock, why, and what we can expect to see from ACIA ahead. So, let’s get right to it…
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ACIA Is Having A Rough Day
As mentioned above, Acacia Communications is having an incredibly rough start to the trading session. As soon as the gate opened, the stock started to fall, and the declines are continuing at the moment. Currently (9:50), ACIA is trading at $80.85 per share after a loss of $6.68 per share, or 7.63%.
Why The Stock Is Falling
While the company hasn’t released any fundamental news today, there is a good reason for the declines. These declines are the result of news from one of the biggest clients that ACIA has. That client is ZTE. Before the bell, ZTE reported its earnings. Unfortunately, the company missed sales expectations. Because Acacia Communications is one of the larger suppliers to ZTE, the company is also feeling the pain associated with the poor sales numbers.
What We Can Expect To See Next
Moving forward, I have a relatively mixed opinion of what we can expect to see. First and foremost, ACIA is going to deal with the pain of its largest customer. That’s simply how business works. In the short term, investor concern will likely keep the stock down.
However, in the long term, my view is still relatively bullish. At the end of the day, the company has done an incredible job coming up with great products and turning them into profits. While the ZTE news may hurt for a while, ACIA is likely to be just fine in the long run.
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[Image Courtesy of Pixabay]