The market never likes it when a company engages in a bidding war. Case in point: the massive 35% haircut laser photonics-maker II-VI (NASDAQ: IIVI) has taken since Feb. 11. That's when it hit all-time highs; the following day, it made a massive acquisition bid for photonics rival Coherent (NASDAQ: COHR) . Combined with the recent technology sector sell-off, it's no surprise to see II-VI well off its highs.
II-VI just won that war, but the price tag was costly. It's cash-and-stock deal totaled a whopping $7 billion, much higher than the initial $5.7 billion bid from Lumentum Holdings (NASDAQ: LITE) back in January. The stock is now on watch at leading rating agencies for a potential downgrade, and investors are staying away.
Still, there could be an opportunity among all the pessimism, leading me to initiate a position.
For further details see:
Why II-VI Is the Stock I'm Most Excited to Buy in April