MaxLinear downgraded to Hold from Buy at Craig-Hallum

Craig-Hallum downgraded MaxLinear (MXL) to Hold from Buy with a $25 price target. MaxLinear’s inventory burn continues into Q3 and its guidance came up “well short” of consensus and the firm’s estimates, noted the analyst, Though MaxLinear believes Q3 will be the bottom, “we don’t think investors will believe it until it is clear,” the analyst added. MaxLinear also terminated the Silicon Motion (SIMO) deal yesterday, citing material breach, without providing more detail, and while this “certainly could be a negotiating tactic to get a lower price,” it is not clear if such negotiation will take place, nor how long it will take and it is the firm’s understanding that “these claims rarely win except in cases of fraud, and we have no info to that effect.”