Acacia Communications stock plunges after Chinese company banned from U.S. commerce
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The Maynard headquarters of Acacia Communications at Mill & Main.
Maynard optical communications equipment manufacturer Acacia Communications is taking steps to suspend its business relationship with a Chinese company that has been banned from buying American products.
U.S. Secretary of Commerce Wilbur Ross announced Monday the activation of the seven-year denial of export privileges of American products for ZTE Corp. after the Department of Commerce determined that the Chinese company failed to live up to a March 2017 agreement.
“Acacia is taking steps to suspend affected transactions and is assessing the impact of these developments on Acacia,” the company said Monday.
After news of the ban Monday, the company’s stock plunged from just over $40 per share to a closing price of $26.48 per share.
On Tuesday, shares opened at $25.51.
The 2017 agreement had ZTE paying a civil and criminal penalty and forfeiture of nearly $1.2 billion after illegally shipping telecommunications equipment to Iran and North Korea, making false statements, and obstructing justice including through preventing disclosure to and affirmatively misleading the U.S. government.
The company also agreed to the seven-year ban if it violated any terms of the agreement. The Department of Commerce now says ZTE made false statements to department’s Bureau of Industry and Security in 2016, during settlement negotiations and last year related to disciplinary actions it said it took against senior employees.
According to the department, ZTE actually paid full bonuses to employees that had engaged in illegal conduct.
“ZTE made false statements to the U.S. Government when they were originally caught and put on the Entity List, made false statements during the reprieve it was given, and made false statements again during its probation.” Ross said in a statement.
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