Harmonic Stock In Focus After Ancora Holdings Sees Clear Opportunity To Attract Buyers
By Stocktwits Inc | First Published Nov 19, 2024, 12:58 AM ISTAncora said it plans to engage in a “constructive and open dialogue” with Harmonic to gauge the board’s willingness to evaluate the company’s standalone prospects compared to a potentially value-maximizing sale to an acquirer.
Shares of broadband and video services provider Harmonic Inc ($HLIT) were up nearly 1% on Monday after investment firm Ancora Holdings said there is a clear opportunity for the company to attract interest from well-capitalized acquirers.
Ancora Holdings Group is a significant shareholder of Harmonic. The firm offers integrated investment advisory, wealth management, retirement plan services and insurance solutions to individuals and institutions across the United States.
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Ancora said it plans to engage in a “constructive and open dialogue” with Harmonic to gauge the board of directors’ willingness to evaluate the company’s standalone prospects compared to a potentially value-maximizing sale to one of the many logical acquirers in the space.
“We consider Harmonic to be a great underlying business, but believe the company does not have infinite time to achieve its full potential,” it said in a statement.
The company believes there is a strong case for Ciena Corporation ($CIEN) as a potential suitor for Harmonic considering it has material strategic motivations.
"Acquiring Harmonic would be growth-, margin- and multiple-accretive, and deliver greater customer diversification and increased supplier power. Notably, Harmonic and Ciena also have a shared board member in Patrick Gallagher,” it said.
Ancora further highlighted in a presentation that Harmonic trades at a depressed multiple due to issues with management’s investor communication, rather than fear of actual execution. The firm believes that Harmonic – which currently trades at around $12 – could achieve $22 per share by meeting its 2026 targets and capitalizing on valuation opportunities.
Shares of Harmonic have lost over 8% on a year-to-date basis. In recent days, retail chatter for the ticker on Stocktwits has mostly been positive.
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