What Happened To JDS Uniphase Stock? Viavi(VIAV) And Lumentum(LITE) Solider On

Judging by search queries and questions that we get, 18 months after JDSU’s spinoff of Lumentum(LITE) and simultaneous rebranding as Viavi Solutions(VIAV), there are still many shareholders wondering where the company went. The stock, then known as JDS Uniphase, was one of the highest of the high-flyers at the turn of the century, soaring past $1000 before cratering fast with the dot com crash in 2000. It was widely held and many shareholders may have put this now insignificant holding out of mind, only to find, 17 years later, that it has disappeared from their accounts.

In fact, in August 2015, they received one share of Lumentum stock for every five shares they had held of JDSU stock. JDSU renamed itself Viavi Solutions, so their JDSU stock will now appear in their portfolio as Viavi stock. Shareholders have to be happy with the performance of Lumentum stock, which has more than doubled since the spinoff and more than tripled since its October 2015 low.  Investors have become excited about the prospects for 3D sensing, now a negligible business, but projected to take off very quickly in the coming quarters.  If this business does not materialize, Lumentum stock may quickly lose ground once again as investors refocus on the core networking business.

Viavi shareholders should be happy as well, as Viavi stock has risen over 60% since the spinoff. Viavi retained 11.7 million shares of Lumentum after the spinoff, of which it still retains 1.7 million. This week, Viavi announced an offering of up to $400 million in Senior Convertible Notes due in 2024. Interestingly, it intends to use the proceeds to opportunistically repurchase similar notes due in 2033, shortening the maturity significantly. Viavi also intends to buy back up to $75 million of its own stock with the proceeds.

For shareholders who have held for decades the gains post-spinoff may be small consolation. The combined value of the stocks is still a small fraction of those old highs, after all. But for investors who bought closer to the spinoff, the returns have been quite good so far. It may be time to sell shares of Lumentum stock in this this time of great optimism for the untapped potential of 3D sensing.

Disclosure: The author holds no shares in any stock mentioned