Why Shares of Acacia Communications Surged 12% in August

Shares of Acacia Communications (NASDAQ: ACIA), a provider of optical-transport and network-infrastructure equipment, jumped 11.6% in August, according to data provided by S&P Global Market Intelligence. News of a tender for optical components by China Mobile on Aug. 23 was the main catalyst, with investors hoping that a downturn in demand from China would finally be reversed.

Acacia's second-quarter revenue tumbled 32% year over year, driven mostly by weak demand from China. The company did say that it was seeing improving order rates during the third quarter from some of its key customers, including its largest customer in China. Whether that will be enough to return the company to growth remains to be seen.

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Source: Fool.com