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Magnachip gains on report that LX Group may submit offer next week

Jul. 08, 2022 11:19 AM ETMagnachip Semiconductor Corporation (MX)CGBy: Joshua Fineman, SA News Editor19 Comments

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  • Magnachip Semiconductor(NYSE:MX) surged 9.5% on a report that potential bidder LX Group is expected to submit a formal acquisition proposal by next Friday.
  • The possible offer comes after LX Group has recently finished its due diligence

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Comments (19)

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Robert Hennecke profile picture
I have a bad vibe I'm being played on this stock. The numbers seem great yet FOOT DRAGGING ON AN EPIC SCALE for the SO CALLED SALE!! What sale...the 15th passed and no comment from the 'CEO' of Magnachip!! What the freakin hell is going on here?! Six dollars in cash, stock is 15,3, no debt, power chipsets/IGBT's etc... locked in Korean auto customers and yet this is freakin dragging on and on and on?!?!?!?!?!
@Robert Hennecke I’m ok with a 1.2 billion deal taking more than 2 months
Robert Hennecke profile picture
@Lucases1 really??? This talk has been going on for close to SEVEN MONTHS!!!! I had gotten out at frustration in May after waiting on these idiots for at least 3 months.
The idiot CEO was supposed to reply by 15th it s 19th here and day is over in Korea. I m out today.... even if it gets an offer the whole process and everything about the situation is completely unprofessional!!
you state this as if MX decides when offers come in/ are accepted. got to get the offer first. but by all means sell, i know if can be tough to wait for a 66% return (15 -> 25)
Robert Hennecke profile picture
I had gotten out with a 5K pos'n for a lousey 1200 gain tying up REAL money in late May out of frustration of the endless dragging of heels. Back in for bigger pos'n <15,3 hoping this FINALLY gets resolved. Made gains in the interim and in retrospect it kept me from getting into positions that slid badly from late January to late May. REALLY hoping this comes through because then I can take advantage of the June massacre and seriously make long term gains. So overall this may have played out well for me <> we have a plus 20 $ offer on the table. No debt, 6 $ in cash, a frowing stable of power supply modules (IGBT'S) needed for power conversion and DC drive units for EV's makes this a definite takeout target. The South Korean gov't surely wants to keep this company competitive and viable IN South Korea.
After LX Group we now also have Bain Capital involved:

@Klarminite great if this is true it’ll be 23+
Omer Altay profile picture
@Klarminite everyone is hung up on LX but there are others bidders as well. LX loi leaked but others out there as well.
@Omer Altay A bidding war would be welcomed.
thehubble profile picture
I'm not sure that the investors will accept a$22.5 offer. My guess is $23-$24.
Jion profile picture
Minimum offered price will be $22.5 imo. Most likely a $24. The Chairman of LX Semicon will approve the offer. Magnachip will accept.
Omer Altay profile picture
@Jion I figured around there as well. Just my guess though. I've added significantly on the way down. With or without a deal MX is stupid cheap below 15. $300m net cash and profitable, with power biz booming. Display biz more risky but CEO claims there is 2x the demand as their production
@Jion I too will accept.
@Jion I’m hoping for 25, same as before with the benefit of the buyback
Get me out of this bummer!
Merchant of Death profile picture
@Klarminite A comment such as this one shows that a bid is not likely. Too many people have been buying/sitting on $MX, hoping that Mr. Market fixes their problems.

News flash: the market doesn't know (or even care) what your cost basis is, how many shares you own, how much this could help repair your battered brokerage account(s). The market is agnostic to your needs.

But the part that worries me is that there's more than one person "hoping" a Korean buyer will take $MX off their hands, will pay X dollars (appears from all of this chatter are hoping for something with a $2X.00-handle on it).

Good luck to all. And FWIW, I hold a sizeable (for me) position in $MX, but I hold it b/c it's so damn cheap. Any unknown, unforeseen takeout by a "motivated buyer" is certainly welcome, but don't bank on it. Also, the part that concerns me (somewhat) is that IT IS so damn cheap. The Market is certainly lots smarter than me.

You always have to ask yourself: what is it the Market knows that you don't?

Or, it could be that Mr. Market is currently in his "needs more Prozac" mode, and we just wait for him to come knocking on the door when he's in a more manic mood.

Just my $0.02
@Merchant of Death i think his comment is one of the more WSB kind, most people own this for the same reason you do
Omer Altay profile picture
@Merchant of Death definitely some special sits people in this entirely for the buyout. Buying at a big discount after a failed takeover due to regulatory reasons is usually a decent play. There were many suitors interested in MX in the first sale process. So there's something here. Macro has changed a lot though, so a discount to previous best offers is to be expected. $29 is off the table. I think they are getting 21-22$ offers and management wants more, but unless macro snaps back it's tough.

I'm in it because it's cheap too. $300m net cash basically and profitable + growing

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