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

To: Sam who wrote (2678)	7/28/2023 8:51:57 AM
From: Elroy	Respond to of 2977

We want to get as much of the $3.5 billion acquisition value as possible. How to do that is the question. If SIMO wins in arbitration, and MXL cannot get financing for the deal, then MXL is at SIMO's mercy I think. Since MXL's market cap now is only $1.8 billion, and cash position is $250m, well, they can't even give 100% of themselves to SIMO and fulfill their debt. It depends on their bankers. What amount are the bankers willing to lend to them (at 9.5%?)? Lets say the bankers will today only lend $2 billion at 9.5% for the deal. MXL has to come up with another $1.5 billion in equity to make SIMO whole on the $3.5b purchase price. $1.5 billion in MXL equity is basically the entire company. And....if SIMO gets the entire company, they don't want the $2 billion loan attached, they just want the equity without a loan. How does this not end up with MXL going bankrupt and being owned by SIMO and other creditors? I wonder where SIMO's contract sits in the bankruptcy stack? MXL has $122m long term debt, but that can probably be paid off with MXL cash on hand. So.....yeah, I think SIMO is going to own MXL when this is all done.