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

To: Paul Senior who wrote (2546)	5/14/2022 12:43:35 PM
From: Elroy	Respond to of 2980

Yeah, I think holding SIMO here is a good idea. Possible bad outcomes - MXL cancels the deal for some reason, or the deal doesn't get approval. Presumably SIMO would go back to about $70 if that happened, but with $160m more cash (the break up fee). Possible good outcomes - Another buyer appears and bids more than MXL MXL and/or SIMO report very strong Q2 and Q3 results. I sort of expect this to happen, but it's hard top tell whether the recent China lockdowns may throw a wrench into forward numbers, or not. I don't know how much of SIMO's downstream supply chain is affected by these Chinese lockdowns. They do seem more severe than previous lockdowns. If SIMO reports very strong results (which I expected sans lockdown) that also may encourage another prospective buyer to step up and pay more than MXL. And the value of the deal is now about $110, so if nothing meaningful happens and MXL's share price doesn't move. SIMO should get there by H1 2022. It's nice to have a cash offer supporting the stock while the tech stock market is crashing.