- POET Technologies' stock surged and then plunged in a meme-stock roller coaster ride this month.
- Shares plunged almost 50% on Monday after Marvell Technologies backed out of a deal with POET.
- Wolfpack Research unpacked why it's been betting against the stock.
POET Technologies has soared and plunged in a matter of weeks, with the market's latest meme stock seeing almost half of its value erased on Monday alone.
The company, which develops hardware for AI infrastructure applications, saw a 47% drop in its stock. That followed a rapid rally in April that saw shares double from $7.51 to over $15. Amid the big swings, short-seller Wolfpack Research released a report detailing a bet against the company, leading to a retort from POET CFO Thomas Mika calling short sellers "maggots."
In an interview with Stocktwits responding to the short report, Mika touted a large purchase order linked to chip firm Marvell Technology.
"We've got a purchase order from them that we're gonna ship against and we intend to continue that relationship and build it over time," he said.
A week later, a statement from POET erased half the month's gain in a day: Celestial AI, the Marvell subsidiary with which POET had a $5 million deal, pulled out after Marvell said that Mika had violated confidentiality.
"Marvell Semiconductor…provided written notice of the cancellation to the Company on April 23, 2026," POET said in a statement. "As the basis for the cancellation, Marvell indicated that the Company had made disclosures of information related to the Purchase Order and shipping information in contravention of its confidentiality obligations."
Dan David, the founder of Wolfpack Research, told Business Insider that he doesn't think Marvell knew about the POET deal, as it was with a subsidiary, Celestial AI, rather than Marvell itself.
However, he noted that he considered the firm a ripe short target prior to the news that send the shares plummeting. Specifically, David said that he had concerns about its status as a Passive Foreign Investment Company (PFIC), with POET being headquartered in Canada.
The PFIC issue relates to companies that are organized outside of the US, with "certain adverse U.S. federal income tax consequences" for shareholders, according to a statement from POET. A day after Wolfpack's short report, POET released an updated statement on its PFIC status, acknowledging that it might be considered a PFIC for tax purposes.
"They said they didn't believe that they were a PFIC, and we did the math and we disagreed," he said.
David added that he was first tipped off to potential problems with POET when an analyst at his firm noted they thought the company had said it was not a PFIC.
The firm also claimed in its report that POET had hired a firm to pay Youtube promoters to tout the stock.
"We track promotional companies," he said. "This fits the bill, companies that don't make money, make a lot of promises, raise a lot of money. Red flag, red flag, red flag," David said. "All of those things check boxes for us to have analysts review."
POET and Marvell did not respond to a request for comment from Business Insider.
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