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Technology Stocks : Investing in Exponential Growth
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From: Paul H. Christiansen8/3/2016 2:45:36 PM
   of 1084
 
Spinoff Is Best Thing That Ever Happened To Young Fiber-Optic Firm

As with baseball trades, sometimes it's for the best when technology deals fall through. Just ask Lumentum Holdings ( LITE).

When JDS Uniphase spun off Lumentum nearly a year ago, analysts expected consolidation in the fiber-optic parts industry, where price competition was fierce. In fact, Lumentum shares shot up from its initial public offering on takeover speculation.

At the time of the spinoff, analysts speculated JDS rival Finisar ( FNSR) was poised to acquire Lumentum, which still had plenty of cash on its balance sheet. But Finisar balked at Lumentum's asking price, and so the new company forged ahead with its post-spinoff growth strategy.

Meanwhile, Lumentum's stock tumbled as disappointed investors fled. Lumentum stock bottomed out at 14 in October, but has surged since then.

investors.com



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