What Happened?
Shares of materials and photonics company Coherent (NYSE:COHR) fell in the morning session after major investor Bain Capital offered to sell another significant block of the company's shares at a potential discount. According to reports, Goldman Sachs offered 5 million of Bain Capital's shares in a price range that represented a potential discount of up to 3.4% from the previous day's closing price. The offering, valued at up to $987.3 million, marked the third time in just over a month that the private equity firm moved to reduce its holdings in the laser equipment maker. Such a large sale, particularly at a reduced price, often puts downward pressure on a stock's price as it increases the supply of shares available on the market and can signal a decreased confidence from a major shareholder.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Coherent? Access our full analysis report here.
What Is The Market Telling Us
Coherent’s shares are extremely volatile and have had 46 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 17 days ago when the stock gained 8.7% on the news that renewed enthusiasm for Alphabet reinvigorated the artificial intelligence trade, propelling a market rebound heading into the Thanksgiving holiday. The Nasdaq index jumped 2.6% and the S&P 500 gained 1.6%, driven by a 5% rally in Alphabet following the announcement of its upgraded Gemini 3 AI model. This optimism spilled over into the broader tech sector, lifting shares of Broadcom, Micron, and Palantir significantly. The rally built on momentum from the previous trading session, sparked by the New York Fed president keeping the door open for a December interest rate cut.
Coherent is up 97.1% since the beginning of the year, and at $198.28 per share, has set a new 52-week high. Investors who bought $1,000 worth of Coherent’s shares 5 years ago would now be looking at an investment worth $2,829.
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