POET Technologies (POET (POET)) had a wild Wednesday. The stock initially plunged, then partially recovered, as traders digested two big events: a massive $400 million capital raise that closed Monday, and a scathing short-seller report that came out Friday.
The capital raise involved issuing 19.05 million new common units and an equal number of warrants to a single institutional investor at $21 per unit. That's a lot of new shares hitting the market, and it usually puts downward pressure on the stock.
Short Seller Alleges Dead Partnerships
Adding fuel to the fire, short-seller firm Night Market Research disclosed a bearish position against the semiconductor company on Friday. In its published note, the firm alleged that POET has systematically overstated its partnerships and misled investors about its commercialization timeline.
Night Market Research explicitly claimed that key corporate relationships are defunct, stating, "Celestial AI / Marvell Technology Inc (Marvell Technology (MRVL)) canceled product orders, citing 'disclosure issues.'" The short seller highlighted that a Senior Director of Product Management at Celestial AI stated that "POET hasn't been discussed internally since 2023."
Discrepancies In Corporate Disclosures
The short-seller report also brought to light contradictions regarding other prominent alliances. While POET touted a partnership with LITEON in its latest earnings release, the note claims LITEON's President stated, "LITEON doesn't cooperate with [POET]" and "there isn't actual business between us."
Furthermore, checks conducted by the firm at the OFC 2026 conference indicated that Foxconn, also known as Hon Hai Precision Industry (Hon Hai Precision Industry (HNHAF)), stopped using POET two years ago.
POET Technologies did not immediately respond to a request for comment.
Weak Q1 Earnings Miss Estimates
The ongoing drop continues a wave of high volatility originally set off by the weak first quarter of 2026 financial results reported on Thursday.
POET posted a wider-than-expected GAAP loss of 8 cents per share, missing the analyst consensus estimate of 5 cents per share.
Despite the bottom-line miss, quarterly sales reached $503,389, beating the analyst consensus estimate of $300,000, according to market data.
POET Price Action: POET Technologies shares were up 7.15% at $14.00 at the time of publication on Wednesday, according to market data. In the premarket, the stock was down.
Over the past month, POET has gained about 90.6% versus a 3.5% rise in the S&P 500 and is up roughly 109% year-to-date compared to the index's 7.0% gain.
