If you work at Lumentum and own company stock, Monday's news probably felt like a win. Marvell agreed to buy Lumentum in an all-stock deal valued at about $115 billion, the largest merger ever between two public tech companies, and every Lumentum share will become 4.5 shares of Marvell.
But a deal like this changes almost everything about your company stock, and the details that matter most aren't in the headlines. The right moves depend on your grants, your tax lots and how much of your net worth is tied to one stock. That's exactly the planning I do with tech employees and executives going through deals like this, and the time to do it is before closing, not after. Click here to book a free strategy call.
Here are five things to watch:
1. What your shares are really worth
The $1,132 per share in the headlines is based on where both stocks traded before news of the deal leaked. It's not a price anyone is guaranteeing you.
You're getting a fixed 4.5 Marvell shares for each Lumentum share, so the real value moves with Marvell's stock. Marvell fell sharply on Friday, and at Monday morning's price of roughly $198, 4.5 shares were worth closer to $890. Nothing about the deal changed. That's just how a fixed-ratio deal works.
From now until closing, your Lumentum shares will mostly track Marvell's stock, not Lumentum's own results. If $1,132 has become the number in your head, rerun your net worth at today's Marvell price. You may make different decisions with the real number in front of you.
And remember that you don't have to wait for closing. If your trading window is open, selling some Lumentum shares now locks in today's value and lets you choose which tax year the gain lands in.
2. Whether, and when, the deal actually closes
Signing a merger agreement isn't the same as closing one. This deal still needs approval from both companies' shareholders, antitrust clearance in the U.S. and other regulatory approvals. The agreement runs until November 1, 2027, and can be extended as late as August 1, 2028 if regulators are still reviewing it.
One detail tells you how seriously both sides take that risk: Marvell agreed to pay Lumentum $3.2 billion if the deal falls apart for regulatory reasons. Nobody writes a check that size into a contract unless they expect a long, hard review.
So plan for the possibility that your wealth spends a year or more tracking Marvell's stock while you still work at Lumentum, and for the possibility that the deal never closes at all, in which case Lumentum's stock could drop quickly. Holding every share and waiting for closing isn't a neutral choice. It's a bet on both outcomes going your way.
3. What happens to your RSUs, PSUs and options
The merger agreement spells out exactly how your equity awards will be treated, and it's worth reading closely:
RSUs: Converted into Marvell RSUs at 4.5 Marvell shares for every Lumentum share, with the same vesting schedule and termination protections you have today.
Stock options: Converted the same way, with your exercise price divided by 4.5, so the total value of the option stays roughly the same.
PSUs: Converted into regular time-based Marvell RSUs. For stock price goals, you're credited at whichever is higher, target or actual performance. Other goals are measured at projected actual performance through closing.
That PSU change is the one people misread. The performance risk goes away, but you still have to stay employed through the original vesting dates to receive the shares. If your role changes or disappears after closing, what you keep depends on Lumentum's change-in-control and severance plan and the terms of your own grants. Find out now what happens to unvested awards if you're let go after the deal closes, not after it happens.
4. When the tax bill actually hits
For the shares you already own, the news is mostly good. Stock-for-stock deals like this are commonly structured so the swap itself isn't taxable, and your cost basis and holding period carry over to your new Marvell shares. The joint proxy statement will confirm how this one is treated. Any cash you receive for fractional shares is taxable, but that's usually small.
Your equity compensation is a different story:
RSUs: Taxed as wages when they vest, deal or no deal. Withholding is often a flat 22% federal rate, which can fall well short for higher earners.
Nonqualified stock options: The spread is taxed as ordinary income when you exercise.
Incentive stock options: Exercising and holding can trigger alternative minimum tax, even though you haven't sold anything.
And the biggest tax decision isn't automatic at all: whether to sell some Lumentum shares before closing, in a year you choose, or hold everything and become a Marvell shareholder. Which lots you sell, short-term or long-term, and in which year, can change your tax bill more than the deal itself.
5. For executives: the golden parachute tax
Buried in Lumentum's filing about the deal is a detail most people will skip. Lumentum agreed to make its CEO whole if he owes the golden parachute excise tax, and its board approved similar agreements for its other named executive officers. Deals that cover this tax have become rare, so it's a meaningful benefit for those few people.
But it only covers that small group. If you're a vice president or senior leader with change-in-control benefits, you may face the same tax with no one covering it.
Here's how it works. Section 280G of the tax code looks at payments tied to a change in control, like severance, deal bonuses and the value of accelerated vesting. If those payments reach three times your average pay over the prior five years, everything above one times that average gets hit with a 20% excise tax on top of regular income tax. Recently promoted or recently hired executives are especially exposed, because their five-year average is low compared with their current pay.
Check your agreement to see whether it cuts payments back to stay under the limit, pays whichever result leaves you better off after tax, or leaves you fully exposed. Because the calculation is built on prior years' pay, some planning is possible, but almost all of it has to happen before the deal closes.
Where to start
You don't need to wait for the proxy statement to get organized. Pull your vesting schedule and grant agreements, list your shares by purchase date and cost basis, and figure out how much of your net worth is in Lumentum stock at today's real value, not the headline one. If you're an executive, add your change-in-control agreement to that pile.
With that in front of you, every decision above gets clearer. If you'd like help working through them, click here to book a free strategy call.
About the Author
Michael Walstedt, CFA, CFP®, is the founder of Reliant Wealth Advisory, a fee-only fiduciary firm based in Hoboken, New Jersey. He helps executives, tech professionals, and business owners make smart decisions about equity compensation, taxes, and investing.
This article is for educational purposes only and is not tax, legal, or investment advice. Deal details are based on public filings and news reports as of November 2, 2026, and may change. Consult a qualified professional about your specific situation.
