POET update: Just getting started
I had no intentions of getting into analysis of individual tickers here for quite some time, but the recent interesting situation with POET made me feel like writing out an analysis for those unfamiliar with the situation might give me a clearer view of my own thesis, and maybe introduce some people to an interesting market space. A lot has happened in a short time since my writing, and I feel like an update makes sense. Again, I will try to keep my focus on POET and its evolving situation without getting too bogged down in overall market pressures I see as relevant, but no promises. We will get into the inference and actual numbers and deeper analysis later, this will just be a brief overview. I have a lot to say about this situation, honestly probably too much, so we will save that or later.
When my previous piece was written on April 26th, POET’s share price had just climbed from below $5 in early April, to a high of $15.50. I have been tracking POET for quite some time, and have many reasons why I believe that it has been misunderstood and is overdue for a structural rerating. The public narrative seems to be that the run was triggered by an interview with POET’s CFO, and statements made in part to refute the WolfPack short report citing FPIC tax risks. During the meeting Marvell was mentioned as a partner awaiting orders (this information was already publicly available and easily inferable).
A climb like that, a single ticker ballooning to overconcentrated allocation, citing the catalyst as orders which were already known, all of this and more should have had me taking advantage and exiting my POET options positions. But my long-term conviction coupled with a seeming gap between market reality and narrative gave me pause. Other than a few July 17th Calls hitting my outlandish limit sells, I held everything through the weekend. Although my multi-year horizon and upside potential seemed reasonable, even if rerating were to occur redomiciling to the US (publicly framed as a way to assuage tax-based fears promoted by WolfPack), I expected a pullback even if just to allow market makers to reposition. Part of the reason I felt compelled to write about POET at all was because I imagined the psychology of how the expected dip would effect me, and I felt that sharing my outlook might help someone in a similar situation (I suppose as well as myself) to not be unduly influenced by fear and uncertainty.
Just before market open on the following Monday, a story was released which announced that Marvell had publicly cancelled their outstanding orders with POET, and were alleging that this was due to a breach of an NDA. When markets opened, POET dumped, and I felt all of the things I was anticipating feeling. I had no stop loss in place, and was prepared for a crash down to POET’s cash value.
But interestingly, price did not free fall. It quickly found support and volume around $8, and over the rest of the day eased down to around the $7.25 range (the institutional buy-in price from the last three institutional placements, which I had considered obvious future support since those announcements). I assume that this was institutions protecting their buy-in price, and continuing accumulation.
A few days later, the drop found its bottom around $6.50, interestingly this is the area where I believe I saw the largest concentration of puts in what I believed to be institutional sold-put accumulation while the market seemed to be expressing dilution concerns regarding the share placements.
From this point until May 5th, trading was high volume and appeared to be locked in a relatively tight range. The amount of volume during flat pricing, the anomalously bullish options chain remaining through the drop, and elevated off-exchange percentages increased my confidence that this was an institutionally driven situation, and that internalization of order flow was mitigating public price discovery.
On May 5th, POET shares surged almost 30%, with volume above half of all outstanding shares. This trend continued, with massive volume at elevated prices, regaining the previous high around $15.50, with seemingly no public fundamental catalyst.
On May 12th, Sandeep Kumar was named as COO. He has 18 years of global operations experience with Silicon Labs. Two days later, POET announced a confirmed purchase order with Lumilens valued at $50 Million, which was part of an overall 5-year plan with a production value of over $500 Million. This is significant for the obvious reasons, but also it is exciting to see a capable company with it’s own silicon photonics and mixed-signal interconnect systems choose POET. At the same time, a co-development agreement was announced with LITEON. Q1 2026 earnings were announced: $503,389 revenue, up 194% year-over-year, beat consensus by 100%. Share price hit a new all-time high of $20.81 intraday, and climbed to $25.68 after hours.
The next day, price pulled back to $17-20 range, and then dropped below $16 on a volume spike right before close. I would imagine this drop was at least in good part due to options expiry mechanics forcing market maker delta to unwind. If my thesis is correct, then the options which expired in the money are to be exercised and effectively locked up in institutional long positions. Stock held the previous all-time high of $15.50, which I was pumped about, and saw potential as a new floor forming.
The volume (and the elevated prices at which shares were trading) over the last three weeks has been pretty staggering, and I believe lines up with my ideas of rerating and institutional capture of the float before redomiciling. The whole situation feels uncanny to me; the oversubscribed offerings at premium prices, the impossibly bullish and unhedged options chain for weeks even ahead of any of this, the strange volume and price action, the timing and nature of the press releases, the reaction of the options chain (from what I could see, OI seemed to slide upward with the shift in spot price), elevated IV persisting, new strikes gaining liquidity right away, elevated off-exchange percentages, none of what I was seeing seemed to have anything to do with retail speculation patterns. But the situation was aligning with my predictions and thesis so well, I feared that I was not seeing something, or that I was forcing a narrative of shakeouts and strategic announcement timing. Are my eyes clouded by hope? Are the waters simply muddy, or being muddied?
A large number of interesting events seemed to be facilitating institutional capture. The probability that all of them aligned by chance feels small, but of course possible. Convergent incentives among informed actors, each acting rationally in their own interest, is the most complete explanation that doesn’t require formal conspiracy. But the oversubscribed placements predating the public redomicile announcement implies to me that the transition plan existed before it was public.
The thing that I kept coming back to was the sell-side liquidity at these prices; if this was a market reaction to news and the order cancellations, why did it appear to be so orderly? Trading the entire float multiple times over at prices above double the highest analyst price targets should be an absolute clusterfuck.
But when I look at the charts, I see control. I see the overall whiplash, but not erratic volatility. I see the price jumping and dropping, only to be absorbed and maintained within defined ranges. Retail behavior tends to concentrate volume flow around price movement; retail buys into momentum, panics into drops, reduces activity when price is stable. I was seeing the inverse, hundreds of millions of shares transacting in anomalously stable, flat ranges. Retail just doesn’t have the capital for flat-price accumulation moves like this, but even if they did, if they were jumping in and out individually on the heels of alternating elation and catastrophe the price should be all over the place.
I have been presuming institutional accumulation for a long time, but this seems to be to be a direct and public display of it. I see no explanation for the last few weeks other than a confirmation of my thesis, and the use of an organized liquidity regime. The capital structure, the timing of events, the timing of their public broadcast, redomiciling mechanics and unlocking investment capital, the dark pool routing, the volume profile at flat prices, the options chain architecture, the perfectly timed alternating announcement sequencing of FUD and bullish scaling confirmations, the crash low being instantly supported, these are all potentially independent events. But the orchestration, and the convenience of this unlikely chain of events serving the needs of the very process of institutional capture which I had been supposing for months, this doesn’t feel like noise.
I have no way of knowing exactly what has happened, and probably never will. This situation could be the result of convergent incentives among multiple sophisticated actors each responding rationally to the same structural reality, this would explain most of what is going on. This could be a coordinated plan in which shared non-public information (the redomicile timeline, the commercial pipeline, the institutional transition architecture) was used by multiple actors to position before any of this became public. I am sure there are both legal and illegal versions of this. I will spend a lot of time picking this situation apart and I may never get any real confirmation.
But to me, this being the playing out of a controlled liquidity regime to prevent spot price from running too hard before institutions have locked in their positions seems undeniably likely.
Sometimes when I am analyzing a system, I like to attempt mirroring; if I were in the other system looking back at myself, what would I see? I was thinking about this idea of mirroring, when I realized something. I have been theorizing and tracking the idea of US institutions locking up the float, but what about Canadian institutions?
We will analyze this in more granular detail later, but the redomiciling of POET to the US (which I have been predicting all along would be a necessary part of my thesis playing out) unlocks an enormous amount of capital from funds currently restricted due to foreign status, and the eventual indexing of POET will lead to forced buying. I have been thinking about this for a long time, but I hadn’t thought about their mirrored partners, the institutions who are legally and contractually obligated to sell their POET shares in the event that it were to become a foreign entity.
The volume and my theory of an organized liquidity regime made even more sense to me now, and I am wondering if what we have just witnessed is the continuation of an orderly handoff arranged by Canadian and American institutions. How long has this been planned? Which tools of narrative control and price action were simply capitalized on, and which were orchestrated? I am not sure that it matters, but that won’t stop me from trying to dig in and find out.