2024-05-23 01:38:42 ET
Summary
- Semtech management quickly realized they overpaid for the acquisition of Sierra Wireless and may write down more of the remaining goodwill and intangibles.
- The expected earnings supplement from the acquisition didn't materialize, but the company is chained to the debt secured for that purpose.
- The company's debt from the acquisition will continue to burden the company, hindering its ability to improve margins and resulting in a disappointing trend in bottom line.
- Unless the company is hiding an ace up its sleeves on Sierra Wireless, the outlook seems quite bearish on the stock price.
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For further details see:
Semtech: (Early But Costly) Realization Of An Irreversible Mistake