Finisar ( FNSR ) stock fell Thursday after the optical device maker in a regulatory filing clarified that Apple ( AAPL ) has not made an investment in the company and that $390 million in funding for a new manufacturing plant represents "anticipated future business."
[ibd-display-video id=3023066 width=50 float=left autostart=true] Finisar stock soared nearly 23% on Wednesday after Apple announced it was providing funding for a new manufacturing plant in Sherman, Texas, expected to make parts used in 3D sensors for the iPhone X. Apple said it was awarding Finisar $390 million from its Advanced Manufacturing Fund .
"Questions have arisen regarding news reports of Apple's announcement this morning regarding a $390 million award to Finisar," Finisar said in a filing late Wednesday. "Apple has not made a debt or equity investment in Finisar. The amount referred to by Apple represents anticipated future business between the companies over a period of time."
Finisar shares fell 4.1% to 22.72 on the stock market today . Apple edged down a fraction to 172.22.
Apple initially is using 3D sensors for facial recognition in the iPhone X. It's expected to use 3D sensors for augmented reality apps in the future.
The $390 million, says one analyst, represents a revenue commitment from Apple for anticipated orders after manufacturing of vertical-cavity surface-emitting lasers (VCSELs) ramps up.
"We think the rise in Finisar is justified even if the read off the Apple story was misinterpreted. In fact, we think it's probably a better outcome," Alex Henderson, a Needham analyst, said in a note to clients. He says Finisar is less dependent on Apple the way the deal is structured.
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"To take an investment like that from Apple has costs on margin and pricing," Henderson went on to say. "Making the investments and building the facility and staffing it up on (their) own dime likely has a higher return long-term as it provides the company flexibility to sell to other customers."
Lumentum Holding ( LITE ) climbed 2.2% to 51.38. Lumentum currently is supplying the lion's share of 3D sensor devices to Apple, analysts say. Lumentum stock fell nearly 3% on Wednesday on reports of a budding Apple-Finisar partnership.