As a shareholder of Mitek I appreciate your write up so thank you! I agree with what you wrote up but one thought I keep having since company is only 500m market cap would it make sense for another bigger company to buy them out 🤔 and if so who because if they get rid of current problems I think they should be a good target for take over due to their tech, no? So basically would like to know your opinion about them being a target for merger . Otherwise I’m a shareholder but given what’s going on keeping myself my toes
thanks for the comment, and bringing that up. This is a piece that literally could have been 10,000 words instead of ~2600, so there are angles I didn't really have space to mention, and M&A is one of them.
I do think you have to wait for legal certainty before you get a sale. Even if the CEO of Company X thinks the USAA liability is a nothingburger, as the kids say, she's got to get it by her board and major shareholders. So there's a hurdle there.
That said, they did have a credible offer for $10 per share — essentially the current price — back in 2018, when the business was ~half this size. They rejected that offer. With the PE money sloshing around right now, if they clear the legal issues and want to sell for high teens or even $20-plus, depending on how the business runs from here, I think that is highly likely to be an option.
As a shareholder of Mitek I appreciate your write up so thank you! I agree with what you wrote up but one thought I keep having since company is only 500m market cap would it make sense for another bigger company to buy them out 🤔 and if so who because if they get rid of current problems I think they should be a good target for take over due to their tech, no? So basically would like to know your opinion about them being a target for merger . Otherwise I’m a shareholder but given what’s going on keeping myself my toes
thanks for the comment, and bringing that up. This is a piece that literally could have been 10,000 words instead of ~2600, so there are angles I didn't really have space to mention, and M&A is one of them.
I do think you have to wait for legal certainty before you get a sale. Even if the CEO of Company X thinks the USAA liability is a nothingburger, as the kids say, she's got to get it by her board and major shareholders. So there's a hurdle there.
That said, they did have a credible offer for $10 per share — essentially the current price — back in 2018, when the business was ~half this size. They rejected that offer. With the PE money sloshing around right now, if they clear the legal issues and want to sell for high teens or even $20-plus, depending on how the business runs from here, I think that is highly likely to be an option.