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

To: Sam who wrote (2527)	5/6/2022 12:16:15 PM
From: Elroy	Read Replies (2) \| Respond to of 2980

Here is a transcript of the CC: I listened to the call. I don't think it contained much of anything interesting for SIMO shareholders, other than the description of the break up fee. If SIMO accepts another buyout offer, they gotta pay MXL $132m, that's less than $4 cash per share. The problem for SIMO shareholders is SIMO management didn't do their normal call where they review Q1 and discuss trends, and most importantly, update 2022 revenue and gross margin guidance and give specific Q2 revenue and gross margin guidance. They have been silent. The deal isn't done yet! SIMO's decision NOT to provide that information (which they provide every quarter) seems wrong. The info would help shareholders evaluate whether to vote yes or no on the sale. We're going to see at least Q2 and Q3 2022 numbers before the deal closes, so .... I don't know why SIMO isn't giving normal guidance. It's irritating. My thoughts are if SIMO was going to reduce full year 2022 guidance (China lockdown, supply chain snafus, whatever) then the deal is a great thing. On the other hand, if SIMO was going to maintain their previous guidance up sales up 20%-30% in 2022, then the deal is too cheap and shareholders should vote NO. I was actually expecting SIMO to increase 2022 revenue guidance in the Q1 earnings call. They said repeatedly if they can get more allocation from TSMC, they will increase guidance. Last year they got more allocation in Q1, and increased guidance on the 2021 Q1 call. I expected the same thing this year. But......no call, and no guidance. Why? I can only speculate. My hunch now is that IF Q2 and Q3 are better than expected (expectations are already VERY strong) then it seems reasonably likely that a second (or third) buyer appears, and we get a bidding war. The interesting thing is the other buyers don't need to hurry. Since the deal isn't expected to close until H1 2023, other interested parties can wait until November 2022 to see how high the SIMO revenues will go, and then assess whether they want to pay more than $120/share. As usual the market totally disagrees with me about SIMO, and the shares are $17 below the current buyout price. Why? I really don't know. I don't know why the market continuously assigns SIMO a much lower valuation than they seem worth to me. As far as I can tell SIMO's position in the flash controller segment is just getting stronger and stronger, and that should lead to the ability to increase profit margins, and a higher multiple. But the opposite seems to be happening, and I really don't get why.......