Marvell CEO Says Top Shareholders Back $115B Lumentum Deal After 51% Stock Slide

Marvell Technology shares fell roughly 51% in one month, and CEO Matt Murphy has now put that number in writing to staff. In an email titled "Putting the Week in Perspective," filed with the SEC on Tuesday as merger communication, Murphy argued the selloff reflects sector-wide pressure, not rejection of the company's planned acquisition of Lumentum.

The deal is large by any measure. Under the Nov. 2 agreement, Lumentum holders would receive a fixed 4.5 Marvell shares for each Lumentum share. At announcement, that implied an enterprise value of $115 billion, or about $1,132 per Lumentum share. The fixed ratio cuts both ways: Marvell's 51% decline has already lowered what Lumentum holders would receive. Murphy reiterated that the deal is not expected to close until the first half of calendar 2028, pending approval from both shareholder bases and regulators.

What did Murphy tell employees?

He addressed the criticism directly. Murphy said he and Lumentum CEO Michael Hurlston traveled to Boston and New York to meet some of the companies' largest shareholders. "While some of the initial analyst commentary and media coverage reflected a misunderstanding of the strategic rationale for the combination, our conversations with major shareholders told a very different story," he wrote. Those holders, he added, "understood the opportunity to bring together leaders in silicon and optics."

Murphy said the most frequent question he heard was why do the deal now, with both companies growing fast. His answer: optical links are moving into scale-up and scale-in connections inside AI systems, and customers are choosing technology for that shift now.

That is a roadmap claim, not an order book. The memo offers no customer names, no design-win figures and no revenue commitments. It is a CEO characterizing private meetings. No shareholder has spoken on the record in the memo's pages.

How does Marvell frame the stock slide?

Murphy's comparison is relative. He said Marvell's roughly 51% one-month decline sits close to the 49% average fall among its AI connectivity peers, that Lumentum fell by a similar amount, and that Marvell remains up about 66% year to date.

He attributed the selling to uncertainty over how long the AI infrastructure investment cycle will last. He also cited post-U.S.-midterm attention to data-center growth and "the possibility of additional restrictions on their development."

The memo has gaps. It did not name the peer group behind the 49% figure. It did not give the dates behind the one-month measurement window. Both numbers are Murphy's own count, presented without methodology.

What is at stake for the merger terms?

The arithmetic is unforgiving. Because the exchange ratio is fixed at 4.5 Marvell shares per Lumentum share, every further decline in Marvell stock reduces the value Lumentum holders would receive. A 51% drop in the acquirer's shares, sustained to close, would compress the effective deal value far below the $115 billion implied at announcement.

That dynamic creates a feedback risk. Lumentum holders vote on the deal too. If Marvell shares keep sliding, the fixed ratio becomes harder to sell to the target's investor base, even if Marvell's own holders stay supportive.

The timeline compounds the exposure. A close in the first half of calendar 2028 leaves the fixed ratio exposed to market moves for well over a year, along to regulatory review across two shareholder votes.

What was not said?

Murphy did not quantify how many shareholders he met, or what share of the register they hold. He did not report any commitments to vote for the deal. "Understood the opportunity" is not the same as "will approve the merger."

He also did not address the possibility of renegotiating the exchange ratio, a step acquirers sometimes take when fixed-ratio deals lose value. Nothing in the memo rules it in or out.

The peer comparison, likewise, needs context the memo omits. A 49% average decline among connectivity peers describes a sector drawdown. It does not establish that Marvell's specific deal exposure played no role in its additional two percentage points of decline.

For now, the strongest confirmed facts remain the terms: 4.5 shares, $115 billion implied at announcement, and a close no earlier than the first half of 2028. Whether shareholder support holds through a two-and-a-half-year runway at a depressed share price will decide whether Murphy's Boston and New York conversations were a floor under the deal or a snapshot taken before the votes.