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Trump to Work with Xi on ZTE Deal – Acacia Communications Roars 18%

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Flip-flop on trade good for Acacia at least

In a tweet early this morning, President Trump announced that he and President Xi Jinping of China were working together on a deal to get Chinese smartphone maker ZTE “back into business.” ZTE was forced to suspend its operations after the U.S. government put a 7-year ban on American companies from selling components to the Chinese smartphone maker, who plead guilty to evading U.S. embargoes by buying components from U.S. companies, using them to manufacture equipment, and then shipping them to Iran.

Here’s the tweet from President Trump:

“President Xi of China, and I, are working together to give massive Chinese phone company, ZTE, a way to get back into business, fast. Too many jobs in China lost. Commerce Department has been instructed to get it done!”

It’s estimated that 25-30% of ZTE’s components come from U.S. companies, including Acacia Communications, Inc. (ACIA), whose stock has responded to the news by soaring over 18% in pre-market trading, because ZTE accounted for about 30% of its sales in 2017.

-JP Gravirr

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