Bad News For Super Micro Computer Shareholders: Dilution And Debt

Summary:

• Super Micro Computer has seen a 73% share price increase after receiving an extension from NASDAQ to submit delayed results.
• Despite significant sales growth from the AI boom, SMCI faces cash-cycle issues, raising equity and debt, with unaudited financials raising concerns about profitability.
• SMCI’s market share is declining, with competitors like Dell and Hewlett Packard Enterprise outperforming, and margins expected to contract further.
• Valuation concerns arise from expected sales decline, market share loss, and potential delisting risk, making SMCI’s forward P/E ratio of 11x less attractive.

Investment Thesis

After hiring a new auditor, and receiving an extension from the NASDAQ until February 25, 2025, to submit its delayed audited quarterly and annual results, Super Micro Computer (NASDAQ:SMCI) (NEOE:SMCI:CA) hit

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