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
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