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Technology Stocks : Silicon Motion Inc. (SIMO) -- Ignore unavailable to you. Want to Upgrade?


To: Elroy who wrote (2575)7/20/2022 4:40:18 PM
From: Rarebird  Read Replies (1) | Respond to of 2623
 
Based on the numbers for the take out of SIMO, the stock is trading at a very big discount to the MXL offer. In other words, the market does not expect this deal to go through.

Do you expect SIMO shareholders to approve of the MXL take over? The big question is whether China would allow MXL to acquire SIMO. Again, the market is saying this deal won't get approved.

Why would SIMO executives even consent to being acquired? Must be getting away from Chinese regulations and the synergies with MXL.



To: Elroy who wrote (2575)7/20/2022 6:02:59 PM
From: Rarebird  Read Replies (1) | Respond to of 2623
 
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.

In semi land, I bought TXN a few days ago.

Message 33921931

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.

The other issue is whether MXL will get the financing needed to acquire SIMO. Sure, they are going to use SIMO's cash to help finance the deal, but that won't be nearly enough.

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 a decent balance sheet and I don't think they will have a problem securing a loan.

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