Technology Stocks : Silicon Motion Inc. (SIMO)
SIMO 54.18+0.5%4:00 PM EDTNews

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From: Elroy7/31/2017 8:40:31 PM
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TAIPEI, Taiwan and MILPITAS, Calif., Aug. 01, 2017 (GLOBE NEWSWIRE) -- Silicon Motion Technology Corporation ( SIMO) (“Silicon Motion” or the “Company”) today announced that its Board of Directors has authorized a new program for the Company to repurchase up to $200 million of its ADS over a 12 month period. Separately, Silicon Motion executive officers have notified the Company that they intend to purchase $2.5 million of its ADSs.

“We believe that we are building a great business with a strong foundation of increasing depth and breath of storage products, from differentiated turnkey SSD controllers to unique SSD solutions that address the growing needs of PC OEMs, hyperscaler data centers, automotive OEMs and other applications,” said Wallace Kou, Silicon Motion’s President and CEO. “This year, our business is facing very strong headwind caused by temporary NAND supply tightness. As supply growth accelerates from new 3D NAND capacity coming on line, we believe current headwind will turn to tailwind and our business will rebound.”


They've got about $300m cash and $25m debt. I don't want to see them blow through $200m of $300m cash on share repurchases. A token $40m share repurchase would have been fine.

In 2008 they also had a miss and the shares declined. They spent $70m buying stock around $15, then the financial crisis hit and the shares went to $2. They halted the share repurchase to conserve cash, so they were buying at $15 and not buying at a$2.

Oh well, I guess at least it indicates SIMO management believes their current problems are temporary. Time will tell if they're correct. But I think this is going to be a painful 3 months for SIMO shareholders. Next Q I think the results are going to have EPS below 50 cents, so maybe they get 12x $2 + $8 cash as a share price? $30?

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