Acacia Communications stock down after Senate upholds ZTE ban
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The Maynard headquarters of Acacia Communications at Mill & Main.
Shares of Maynard-based Acacia Communications were down nearly 5 percent early Tuesday in the wake of the U.S. Senate’s vote to reinstate sanctions on Chinese telecommunications giant ZTE.
The Maynard company, which manufactures components used in mobile phones, reported an opening share price of $33.90 Tuesday, down from Monday’s close of $35.26.
The U.S. Senate voted in a defense bill Monday to reinstate U.S. Department of Commerce sanctions on the company, according to the U.S. Senate's website. The vote comes despite concerns from President Donald Trump that ZTE could very well fail if it were not allowed to do business with U.S. companies.
ZTE was sanctioned in April, hit with a seven-year ban on exporting American products after the U.S. Department of Commerce determined the company failed to live up to a March 2017 agreement prohibiting the company from selling products to Iran and North Korea.
An agreement reached with the Trump Administration earlier this month had ZTE had the company paying a civil and criminal penalty and forfeiture of nearly $1.2 billion.
In addition to the hefty fine, ZTE agreed to retain a special compliance team selected by the Commerce Department to monitor the company's compliance with U.S. export control laws.
Acacia Communications, which has said ZTE is its largest customer, said it could lose as much as $13 million in the second quarter if it ZTE were still banned from the U.S.
Last week, when it was thought ZTE would soon be allowed back into U.S. commerce, Acacia announced it will continue its suspension of activities with ZTE until given the go ahead from the U.S. Department of Commerce.
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