Someone explain SITM price action given they 6x their leverage and dilute by 16%

They gap up on acquisition news and earnings, plummet back to \~340 at open, then shoot up to \~428 in 20 minutes

And the acquisition itself adds 900 million in debt to a company that did 82.6M in earnings? And in addition every article seems to call it a 1.5 billion dollar acquisition, but they are also creating over 4 million new shares so it ends up being closer to a 3 billion dollar purchase at their current price and diluting their current share holders by 16%

Ik they had an earnings beat, but seems over bought and they’re going full hopium on data center buildout to keep its current pace for years.

Regulatory wise they are gonna argue it’s not a direct competitor due to the MEMS vs quartz difference, and monopolies don’t exist anymore anyways, so probably no issue there.

Their earnings were literally the same for 2022, both years around 82-83 million, yet at its peak it was $100 less back then. The dollar is weaker than it was, but not 33% weaker

This deal won’t even go through till EOY 2026 at the soonest according to them.

Also Renesas says this is for them to focus on their “core business” of making chips, and a certain penny stock going to ruin (dog speed) probably had them looking for cash, but if their timing business is set to generate $300 million at a 70% margins, and its growth prospects are as strong as SiTime claims, why would they sell it. Renesas had a net loss this year of $347 million, and then they sell a division that will do $210 million in profit next year. Probably cause SiTime is over paying for it

Anyways idk I bought $400 3/20 puts