POET Technologies Inc. (NASDAQ: POET) shares staged a notable recovery on Friday, climbing $1.39 to close at $10.97 on the Nasdaq, even as fresh shareholder alerts highlighted an ongoing securities class action lawsuit tied to the company's U.S. tax disclosures and the abrupt cancellation of purchase orders from Celestial AI, now a subsidiary of Marvell Technology Inc. (NASDAQ: MRVL).
The stock touched an intraday high of $11.815 before settling back, reflecting cautious optimism among traders despite the legal overhang. The class action, filed on April 28 in the U.S. District Court for the District of New Jersey, names POET, Chief Financial Officer Thomas Mika, and Chief Executive Officer Suresh Venkatesan as defendants. Investors who purchased POET securities between April 1 and April 27 have until June 29 to file motions to serve as lead plaintiff.
The lawsuit centers on POET's disclosures regarding its status as a passive foreign investment company (PFIC) under U.S. tax law—a classification that can impose additional tax and reporting obligations on U.S. shareholders. On April 14, POET informed shareholders it would provide the necessary information for a qualified electing fund (QEF) election and confirmed its expectation of PFIC treatment for 2025. CFO Mika, however, stated that the company believed it would not qualify as a PFIC for 2026, noting the board's plan to redomicile in the United States.
The controversy escalated on April 27, when POET disclosed that Marvell Semiconductor Inc., following its $3.25 billion acquisition of Celestial AI in December 2025, had canceled all outstanding purchase orders from Celestial AI, including initial production-unit orders announced in 2023. According to an SEC filing, Marvell accused POET of violating confidentiality by disclosing order and shipping details. The news triggered a 47% plunge in POET's stock on that day, wiping out significant market value.
POET Technologies is not a major chip manufacturer but specializes in high-speed optical engines, light-source products, and optical modules targeting AI infrastructure and hyperscale data centers. The company's proprietary Optical Interposer technology bridges photonic and electronic devices, a critical area as the industry races to meet surging demand for faster AI interconnects. The broader photonics landscape has attracted major players, with Marvell's CEO Matt Murphy stating that the Celestial AI acquisition would transform Marvell into a "silicon photonics powerhouse," intensifying competition with Broadcom Inc. (NASDAQ: AVGO) and Nvidia Corporation (NASDAQ: NVDA).
Despite Friday's rebound, significant risks remain. In its April 27 filing, POET flagged uncertainty regarding its ability to restore ties with Marvell, secure new business, fulfill existing purchase orders, and prevent further cancellations or delays. With litigation just beginning, the company faces an uphill battle to regain commercial momentum and investor confidence.
