+44 (0)24 7671 8970
More publications     •     Advertise with us     •     Contact us
Technical Insight

Mixed fortunes for latest floaters

Rubicon, Infinera and IPG Photonics are all new to the stock market in the past year. So how did they all perform?

After going a good few years with barely any compound semiconductor companies going public, the last 15 months or so have witnessed a bit of a change. Photonic integrated circuit innovator Infinera, sapphire substrate specialist Rubicon and fiber laser manufacturer IPG Photonics all listed on the Nasdaq exchange in the US, while 2008 should see at least one more addition when Emcore hives off its photovoltaics unit as a separate entity.

So, how did these new stocks do? Given the great volatility of global markets in the past year, that is not an easy question to answer. But with the Dow Jones, London s FTSE and the Nasdaq index all either flat or down over the past year, any increase in stock value could be viewed as a success.

When it listed back in June 2007, Infinera initially took the market by storm, rising from its IPO price of $16 per share to more than $25 in no time, and outperforming all of the indices for the next couple of months. Since the turmoil of the late summer, however, that price has largely headed south and, as pessimism took a wider hold, Infinera dropped below the $10 mark – 50% below its IPO list price.

Is that a fair reflection on Infinera s performance since going public? Certainly not, would be my view – it may have burned through a large pile of cash during its formative years, but Infinera really does seem to be finding its place in the optical communications industry now. With its client base expanding quickly and its reliance on a handful of major customers shifting to a much more balanced portfolio, it is beginning to look like a force to be reckoned with.

IPG Photonics floated at the very end of 2006 with a launch price of $25. Like most stocks it enjoyed an early boom, but since then it will have disappointed investors. Again, when looking outside general market strife, it is difficult to see why that is. After all, IPG has pretty much cornered the market for high-power fiber lasers and, as a vertically integrated company (it manufactures high-power GaAs laser diodes using MBE at its headquarters in Oxford, Massachusetts), it is also in control of its key supply line.

At the Photonics West exhibition in San Jose in January, IPG indicated a strategic change when it revealed plans to enter the merchant high-power laser diode market, rather than using all of the diodes that it produces internally. Whether the decision reflects lower than expected internal demand following significant expansion remains an open question.

Either way, like Infinera, its stock has underperformed the major indices since that launch, possibly reflecting the negative sentiment around some of the end markets that IPG serves. One application area in which IPG is thought to be increasingly finding its feet is automobile manufacturing. Perhaps the worries of the impact of a slowing US economy on the car industry are weighing down the stock.

Sapphire substrate vendor Rubicon is the most recent addition to the compound semiconductor portfolio, having listed in November last year. It s early days, but, of the three recent additions, Rubicon will have pleased its investors the most, and by early February it had registered a 73% gain on its $14 launch.

That increase could be a direct result of its exposure to the market for high-brightness LEDs. Certainly a comparison with Cree s recent stock performance appears to confirm this – the two stocks have tracked up pretty much identically for the past three months (figure 2) at a time when many others had been crashing through the floor.

While it might make sense for investors to peg Rubicon shares with those of the leading LED maker Cree – despite the latter s use of SiC, not the sapphire material sold by the Illinois-based firm – Rubicon has tough competition in the sapphire substrates field.

Strangely then, the two companies who are market leaders in their own niche have slumped in value, while the one with a smaller market share and the toughest competition is flying high. My guess is that IPG and Infinera may well end up being the better long-term investments, so remember folks: the price of stocks can go up, as well as down.

PIC International to return to Brussels – bigger and better than ever!


The leading global integrated photonics conference and exhibition will once again bring together key players from across the value chain for two-days of strategic technical sessions, dynamic talks and unrivalled networking opportunities.


Join us face-to-face on 18-19 April 2023

  • View the agenda.
  • 3 for the price of 1. Register your place and gain complementary access to TWO FURTHER industry leading conferences: CS International and Power Electronics International.
  • Email info@picinternational.net  or call +44 (0)24 7671 8970 for more details.

Register

Silicon photonics is driven by data center applications
Scantinel lands €10M for next gen LiDAR
Improving optical coupling for hybrid photonic packaging
Wafer-level nanoimprint technology for innovative packaging
Enabling next generation photonic integration and packaging solutions
Researchers control light quanta with sound waves
The best of both worlds: Mature hybrid integration & its applications
HKUST team develops way to couple III-V and silicon
Spain could prioritize PIC manufacturing to lead in EU photonics
Yield improvement techniques in the manufacturing of AWG (Cascade) PLC
“Bringing integrated photonics to daily life”
EVG unveils EVG150 resist processing system
POET announces 800G and 1.6T Optical Engines
DigiQuant project aims to shrink laser diodes
Coherent Appoints Julie Sheridan Eng as CTO
Instrument Systems VCSEL analysis camera wins Photonics Award
ITRI and Ganvix extend GaN VCSEL venture
Nanometre components require sub-nanometre precision
Vector Photonics CTO wins UK engineering award
Lockheed Martin and Ayar Labs Partner on optical I/O
FBH exhibits space qualified laser diode modules
Vector Photonics will present posters at this year’s ISLC
Next stop for InP: consumer applications?
514 nm laser diode replaces argon-ion lasers
PCSELs take ECOC stage
Multi-junction VCSELs save power and space
Rockley Photonics Unveils Next-Gen Laser Spectrophotometer Chip
imec Researchers debut key building block for deployment of 100G PON networks
Vector Photonics' engineer on TechWomen100 shortlist
First III-V commercial Foundry for Spain
SABIC’s announce IR-transparent, solderable resin
TRUMPF and KDPOF become strategic partners for automotive data communication solutions

×
Search the news archive

To close this popup you can press escape or click the close icon.
Logo
×
Logo
×
Register - Step 1

You may choose to subscribe to the PIC Magazine, the PIC Newsletter, or both. You may also request additional information if required, before submitting your application.


Please subscribe me to:

 

You chose the industry type of "Other"

Please enter the industry that you work in:
Please enter the industry that you work in: