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Technology Stocks : The New QUALCOMM - Coming Into Buy Range
QCOM 180.90+2.1%Oct 31 9:30 AM EDT
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To: Elroy who wrote (9071)7/28/2023 11:37:20 PM
From: Lance Bredvold  Read Replies (1) of 9129
 
It sounds reasonable to me Elroy. When QCOM was trying to acquire NXPI and China nixed the deal, QCOM paid the agreed on penalty and moved on as far as I know. And I've had other companies which signed similar agreements in attempted takeovers and each case I'm familiar with just paid the agreed amount for causing trouble to the company they bothered. Come to think of it, as far as I know Broadcom paid QCOM a breakup fee also. It's just a routine contract feature in that sort of situation. Especially when the acquiree is perfectly content to continue on it's path and another company jumps in and tries to take it over.

But maybe SIMO (which I've paid a small bit of attention to over all these years you've talked about them in various places) was seeking to be acquired. And then the breakup fee may be just a joint way for the larger company to help the smaller pay for legal expenses and trouble getting organized for the action. I see they each have similar market caps.

Both MXL and SIMO were hitting new highs on Dec 1 of 2021. I suppose they were both excited by new possibilities and agreed on a merger. At low interest rates if MXL intended to pay any cash. Maybe now they can't afford it even with picking up all of SIMO's ready assets.

Or it the agreement required stock, I see MXL's stock price has dropped by 2/3 vs SIMO's by 1/3.

Mostly just speculating about your question, but tempted to make a SIMO purchase for the first time on Monday just for the fun of it. I just don't know enough about the original motivation or agreement.
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