Today, a small dip in the stock price, as Q1 forecasts were revised downwards, however, Q2 should be at a strong level. This could be considered a buying opportunity.
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Could be. I myself have switched from Supermicro to Nebiuse. I don’t really have a feel for SMCI anymore.
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Well done:
A rookie-like quarter!
Sales and earnings took a proper hit, and profitability didn’t exactly cheer up. Profit shrank and the margin continued its decline, meaning the situation doesn’t look very bright.
Management, of course, talks about AI and large order books, but the numbers currently tell a rather quiet and somewhat worrying story.
https://x.com/earnings_guy/status/1985815748581712032
Company’s own materials
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Supermicro’s momentum continued quite well amidst the AI boom, and the company mostly beat expectations by a significant margin. Although margin pressures are a topic of conversation, the strong demand for server solutions keeps growth prospects bright and order books thick – guidance for the rest of the year was quite ambitious, apparently relative to investor expectations.
Investors’ eyes are now turning toward refining efficiency as the company tries to scale its production to meet the massive investments of large corporations. There is still some work to be done regarding cash flow, but on the other hand, this company is moving at full speed, at least for now.
https://x.com/earnings_guy/status/2018804523448328523
Company’s own materials
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What should one think of this latest arrest/detention situation? It’s rare for a company’s sales managers to be “taken in” no matter what they’ve done…
The stock price is taking a beating, -27% right now.
Don’t dare try to catch a falling knife yet… I think I’ll go look for some buying pants or some bandages.
Does anyone recall a similar situation where the management of a publicly listed company was arrested? And what was the reaction?
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Well, Intellego is certainly a prime example from recent history of when the management of a listed company has been arrested.
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In this Intellego case, the whole case turned out to be a hoax. If and when there are such dishonest people involved in this company as well, based on the news, what else could be found? Is the accounting creative like, for example, Enron and Intellego? After such a big red flag, I would be very cautious about buying, or at least the stakes should be set quite moderately.
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The case discussed above is thus about the smuggling of technology to China against US laws.
The case is directly linked to Supermicro, as articles found online state that Liaw, one of the three recently apprehended individuals, founded Supermicro in 1993 with a few others and has recently been a member of SMCI’s board of directors. Chang has been a sales manager at Supermicro’s Taiwan office, and Sun has been a contract supplier partner.
Here’s a link to the Department of Justice’s announcement on the matter:
What do I think? Experienced investors, in their “guides,” say that bad news follows bad news. That is, after the first problem, new ones keep coming. I personally dismissed the company as an investment target after the Ernst & Young case, about 1.5 years ago, when the auditor gave it a thumbs down and said it could not confirm the company’s financial statements.
The US market is full of interesting IT companies. None of which have been involved in scandals yet. As a personal opinion, investing in Supermicro is more like playing roulette than investing. I base my opinion on the fact that the company’s upside in valuation is limited due to the scandals. It will not get a proper valuation on the stock exchange for years. But this was not an investment recommendation; a skilled trader will surely succeed in making money with Supermicro as well.
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