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Technology Stocks : Silicon Motion Inc. (SIMO)
SIMO 67.38-0.8%3:59 PM EDT

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To: Rarebird who wrote (2578)7/20/2022 11:24:54 PM
From: Elroy   of 2593
 
I was aware of the deal with MXL and that's why I put SIMO in my IRA so I don't have to pay capital gains on the cash portion of the take over.

That's not how it works. The entire transaction is taxable. It's in the prospectus.

I think most retail investors are selling SIMO because they are afraid of China nixing the deal. But I don't see a national security issue involved in the merger.

Well, your opinion is not important. The view of the Chinese regulators is important. If they believe Taiwan is part of China, I can understand that they might not want to sell Taiwanese SIMO to the USA, and then next election have Don Trump come to power, and perhaps prevent SIMO controllers from being sold to China. It's not hard to understand that concern at all.

What I haven't heard is the interest rate that MXL got to acquire SIMO. That is important as the Fed is raising rates. Does MXL already have a rate locked in?

MXL has issued a SEC filing which details the financing in great detail. I think the rate is not yet set, but the info is in the public domain.

The only question in my mind is how committed is MXL to acquiring SIMO?

They are at least $160m USD committed. That's their break up penalty if the deal is declined by Chinese regulators. If they just change their mind, I think they get tossed in jail or something. Maybe SIMO would sue MXL and take those bastards over?
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