Silicon Motion Inc. (SIMO) Message Board

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Technology Stocks : Silicon Motion Inc. (SIMO)

SIMO 97.88

-0.2%

Nov 3 3:59 PM EST

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franklin1

Lance Bredvold

To: franklin1 who wrote (2842)	4/19/2025 8:49:35 AM
From: Elroy	2 Recommendations Read Replies (1) of 2966

The annual report from last year says the actual arbitration proceedings will occur in Oct (or perhaps Nov) this year. In a previous earnings call SIMO said they expect a decision within a month of this actual proceeding. Why the proceeding is so far after the event I do not know. So there may be some resolution in Q4, or earlier if the two parties settle. It's interesting because I'm not sure MXL can come up with a settlement which is much higher than the break up fee ($160m) + merger cancellation expenses (legal fees, merger prep fees, etc. perhaps $20m-$30m). The damages settlement could easily be over $1 billion if the arbitration determines that MXL unlawfully breached the agreement and SIMO shareholder damages should be part of SIMO's damages. -- SIMO's 2024 annual report should be out some time in April, we may get an update. Another thing to watch with SIMO is they're building a new office building at a cost of $57m (land) + $70m (construction). They said a few years ago when the building completes they plan to sell and leaseback the building. That transaction could easily produce $150m cash, or more (depending on what the property market is like these days). The 2023 annual report said the new building was expected to complete in Q4 2023, but it's still going up as of last quarter. That also could finish any day now, and we also should get an update on that for sure in the 2024 annual report. I'm sort of surprised no analysts ask about this on conference calls. If SIMO gets $6 per share in cash selling their new building I think the stock would respond well, but no one seems to even discuss this topic. If MXL pays them $180m in damages, and the new office building sells for $150m, SIMO could exit 2025 with ~$680m cash and no debt. That's more than $20 per share. At $40 price today I doubt the market is thinking about SIMO this way.

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