Marvell Technology shares fell 13% on Monday after the company announced its acquisition of Lumentum Holdings in a deal valued at more than $100 billion. Bank of America downgraded the stock to neutral and cut its price target to $225 from $400. The bank said the deal could prolong pressure on the shares because of the regulatory review, particularly in China, an approximately 50% increase in the share count, and possible customer and distribution-channel conflicts. Analyst Vivek Arya also pointed to a recent contraction in sector multiples, with the Philadelphia Semiconductor Index down about 19% over the past month. The downgrade contrasts with Wall Street consensus, as 40 of the 45 analysts covering Marvell rate it a buy or strong buy.
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