NPTN - Here's Why Synaptics II-VI and NeoPhotonics Crashed on Friday
The Trump administration slapped new restrictions on Chinese technology giant Huawei early Friday morning. As a result, shares of American companies who count Huawei among their largest customers took a steel bath in Friday's trading session. Human interface specialist Synaptics (NASDAQ: SYNA) fell as much as 11.2%. Optoelectronic component makers II-VI (NASDAQ: IIVI) and NeoPhotonics (NYSE: NPTN) lost as much as 12.8% and 19.6%, respectively.
Since May 15, 2019, Huawei has been restricted by an executive order aimed at restricting access to American technologies for "foreign adversaries" and their state-run businesses. The execution of this order is in the hands of the Secretary of Commerce, a title currently held by bankruptcy restructuring expert Wilbur Ross, in consultation with several other high-ranking government officials.
The executive order doesn't mention China or Huawei by name, but Wilbur Ross made that connection on the same day his department added Huawei to the so-called Entity List.