Silicon Motion Technology (NASDAQ:SIMO) stock is up more than 75% today after it was announced that MaxLinear (NASDAQ:MXL) would acquire the company at a $3.8 billion valuation. Shareholders holding SIMO stock will receive $93.54 in cash and 0.388 shares of MXL stock for each American Depositary Share (ADS) of SIMO owned. One ADS of SIMO represents four ordinary shares of Silicon Motion.
“For 20 years, we have built Silicon Motion with a commitment to advancing innovation, partnering with all of our valued customers and supporting our colleagues around the world,” said Silicon Motion CEO and President Wallace Kou. “Combining Silicon Motion with MaxLinear creates significant economies of scale, accelerates our expansion into enterprise storage markets and unites unparalleled intellectual property to continue serving our customers with high-quality expertise and technical support.”
Following the merger, the combined company is expected to generate annual revenue of over $2 billion with an enterprise value of $8 billion. In addition, the merger is expected to double MaxLinear’s total addressable market to $15 billion, making it a “top-ten fabless semiconductor supplier.” Market expansion includes penetration into the enterprise and consumer growth markets. Synergies between the two companies are forecast to create an annual run rate of “at least $100 million to be realized within 18 months after the transaction closes.”
5 Investors Betting Big on SIMO Stock
Tracking institutional ownership is important, as these large investors provide liquidity and support for stocks. During the first quarter, 186 13F filers disclosed a stake in SIMO stock, a decline of four filers from the prior quarter. Of those filers, nine owned SIMO in their top 10 positions. Meanwhile, the institutional put/call ratio as of Q1 tallied in at 1.85, down from 3.1. That’s equivalent to 4.16 million puts and 2.24 million calls, implying a bearish options stance. Antara Capital is the largest options holder with ownership of 1.44 million calls and 1.11 million puts.
With that in mind, let’s take a look at Silicon Motion’s top five shareholders:
- Morgan Stanley (NYSE:MS): 1.18 million shares. Morgan Stanley acquired 66,771 shares during Q1.
- Millennium Management: 1.10 million shares. Millennium sold 28,017 shares during the first quarter.
- Melqart Asset Management: 979,212 shares. Melqart acquired 317,371 shares during Q1.
- Sand Grove Capital Management: 865,012 shares. Sand Grove sold 196,043 shares during Q1.
- Adage Capital Partners: 682,885 shares. Adage sold 113,652 shares during the first quarter.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
