Mordechai Yavneh, founder and PM at Focus Capital, discusses his investment in Silicon Motion (SIMO) and why he thinks it's "merger arb for people who don't like merger arb."
Focus Capital's research site (with SIMO deck): https://focuscapitaladvisers.com/research
Chapters
- 0:00 Intro
- 2:40 Why SIMO is different than normal merger arbitrage
- 6:00 More SIMO overview
- 11:25 Is the merger overhang impacting SIMO's price?
- 15:30 Discussing SIMO's fundamentals
- 21:30 Why companies are outsourcing to SIMO
- 25:50 Why SIMO is taking share
- 31:30 Breaking down SIMO's market share
- 34:15 Why SIMO's demand dynamics aren't like MU's
- 40:20 SIMO's proxy projections and fundamentals
- 45:35 How Mordechai looks at SIMO's fundamental value
- 52:15 Why MXL wanted to buy SIMO
- 57:00 Why SIMO saw some customer churn in ~2018
- 1:00:00 What are the odds the SIMO deal goes through?
- 1:03:45 Capital allocation in a potential deal break
