Silicon Motion Inc. (SIMO) Message Board

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Technology Stocks : Silicon Motion Inc. (SIMO)

SIMO 88.67

-0.2%

Dec 1 3:59 PM EST

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To: Sam who wrote (2669)	7/27/2023 10:52:49 AM
From: Elroy	1 Recommendation Recommended By Sam Read Replies (1) of 2977

Ok, I think the likely outcome here is MXL and SIMO go to arbitration in Singapore. SIMO's story will be that MXL breached the contract. The deal papers say that if SIMO wins they can get either the break up fee ($160m) or force the contract to move forward, but not both. SIMO's press release says they will try to force MXL to move forward with the purchase. MXL made four allegations in their press release which cancelled the deal - three about how SIMO was in violation of the contract, and one about deadlines expiring. MXL is going to have to prove some or all of those claims in Singapore arbitration to avoid penalty. Perhaps the two agree to a reduced deal price rather than proceed with arbitration. Lets see. I think MXL's position looks pretty tenuous and weak. If MXL can't get the financing to move forward with the deal, I can see MXL going bankrupt and SIMO shareholders owning all of MXL. Unfortunately, the average length of time for Singapore arbitration is 14 months. So......by September 2024 the landscape for everything could look very different, who knows what will happen?

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