Silicon Motion Inc. (SIMO) Message Board

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Technology Stocks : Silicon Motion Inc. (SIMO)

SIMO 88.61

-0.1%

3:59 PM EST

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From: Elroy	7/28/2023 8:24:28 AM
	of 2977

Ok, someone explain to me why this outcome is incorrect? 1.SIMO goes to arbitration with MXL to compel them to complete the deal based on the terms in the contract. In other words, force them to buy SIMO for $93.32 cash + 0.388 shares of MXL per SIMO share. 2.SIMO wins 3.MXL cannot get the financing ($3 billion) and cannot come up with the cash portion of the deal. 4.SIMO sues MXL for damages as the failure to execute the contract harms SIMO shareholders significantly, perhaps as much as $2 billion. I think the harm to SIMO is at least $3.5 billion (the total deal price) minus SIMO's market cap next week without a chance of a deal (unknown, but perhaps $1.5 billion?). 5. SIMO wins the lawsuit, MXL owes SIMO $2 billion. 6. MXL goes bankrupt, and SIMO and other MXL creditors own MXL. I'm sure SIMO and MXL are right now negotiating over resolutions to their situation, but SIMO seems to hold the powerful hand, and I sort of expect SIMO to come out of this owning MXL. MXL needs SIMO to agree to NOT drive them into bankruptcy, which puts MXL at the mercy of SIMO. I wonder if MXL is a good short?

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