Mordechai Yavneh, Founder and Portfolio Manager at Focus Capital, returns to the podcast to discuss how the Silicon Motion Technology Corporation (NASDAQ: SIMO) / MaxLinear (NASDAQ: MXL) deal fell apart.
Focus Capital's research site (with SIMO deck): https://focuscapitaladvisers.com/research
Mordechai's December 2022 $SIMO pitch on YAVP: https://youtu.be/f--RrIG1fAQ
Chapters:
[0:00] Introduction + Episode sponsor: Stream by Alphasense
[1:46] Update since Mordechai's $SIMO pitch with Andrew in December 2022; how $SIMO / $MXL fell apart
[6:49] The four reasons $MXL said they were able to back out of the deal
[13:53] Why $MXL does not really have the right to terminate the deal
[22:37] Back and forth on the necessity for $MXL having to close the deal; how the $MXL / $SIMO situation compares to Twitter case
[31:14] Likely outcome for $SIMO if they pursue arbitration; potential outcomes for $MXL
[35:33] Understanding the difference between "Specific Performance" vs "Expectation Damages" and does breaking these deals set certain precedents?
[40:03] What is the material adverse event $MXL is referring that $SIMO experienced
[45:55] $SIMO fundamentals
[53:04] What $SIMO is seeing in the 2nd half and how their business may perform going forward; Mordechai's 3 year outlook
[1:00:23] What Mordechai thinks earnings for $SIMO looks like in a mid-cycle, normalized environment
[1:07:42] Is $SIMO a seller again or $MXL offer such a big premium, that $SIMO has to take it?
Today's episode is sponsored by: Stream by Alphasense
Are traditional expert calls in the investment world becoming obsolete? According to Stream, they are, and you can access primary research easily and efficiently through their platform. With Stream, you'll have the right insights at your fingertips to make the best investment decisions. They offer a vast library of over 26,000 expert transcripts, powered by AI search technology. Plus, they provide competitive rates on expert call services, and you can even have an experienced buy-side analyst conduct the calls for you.
But that's not all. Stream also provides the ability to engage with experts 1-on-1 and get your calls transcribed free-of-charge—all for 40% less than you would pay for 20 calls in a traditional expert network model. So, if you're looking to optimize your research process and increase ROI on investment research spend, Stream has the solution for you. Head over to their website at streamrg.com to learn more. Thanks for listening, and we'll catch you next time. For more information: https://www.streamrg.com/