Why Silicon Motion Stock Soared Today (and MaxLinear Fell)

Shares of Silicon Motion Technology (NASDAQ: SIMO), a developer of NAND flash controllers, jumped sharply on Thursday even as many other stocks tanked. At its high point during the trading day, shares were up 21.5%. As of 3:07 p.m. ET, that gain had moderated slightly to about 16.7%.

The tech stock's sharp gain was driven by the announcement of an agreement to sell the company to chipmaker MaxLinear (NASDAQ: MXL). Investors in MaxLinear, however, didn't seem to like the deal. Its stock price had plummeted more than 21% as of this writing.

For every share of Silicon Motion, MaxLinear has agreed to pay shareholders $93.54 in cash and 0.388 shares of MaxLinear. This translates to a premium of approximately 48% to the market value of Silicon Motion's stock on April 22. In total, the deal values Silicon Motion at $3.8 billion.

Source Fool.com