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Barchart
Barchart
Mikhail Fedorov

Stay Away from Super Micro Computer Stock. It’s Hostage to Its Own Mistakes.

Super Micro Super Micro Computer SMCI

The situation surrounding Super Micro Computer (SMCI) continues to resemble an action thriller. Over the past five days, SMCI stock has plunged by almost 30%, and the news cycle around shares is oversaturated with negativity. SMCI stock is also down by about 25% for the past 52 weeks.

As I detailed in a previous article, Super Micro has collected a whole array of problems — from the departure of its auditor Ernst & Young to a U.S. Department of Justice (DOJ) investigation over potential chip shipments to China bypassing sanctions. The trail of these stories lingers to this day. However, the latest stock collapse was not triggered by new legal issues but by a harsh financial reality: Super Micro plans to raise up to $7 billion in capital through the issuance of new shares and convertible notes.

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