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  3. SMCI

SMCI

Scheduled Pinned Locked Moved Investments and Portfolios
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  • E Offline
    E Offline
    exIM
    wrote on last edited by
    #30

    I was just digging around for some SMCI info and came across this :

    https://www.sec.gov/cgi-bin/own-disp?action=getissuer&CIK=0001375365

    To me it looks like a lot of recent disposals by directors/officers ?

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    • P Offline
      P Offline
      PM3
      wrote on last edited by
      #31

      Last 6 months purchases/acquisitions of shares 3 x disposals ? Net Hold increase .

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      • A Offline
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        Adam Kay
        Global Moderator
        wrote on last edited by
        #32

        Insider stock sales have always been a source of debate. They are largely irrelevant. When Huang sold $800M in Nvidia stock 2 months ago it was a clear sell signal for the Bears and they make sure you heard about it. A director sells < 1% of his holding for some spare cash. Zuckerburg sold > $1B worth of Meta stock earlier this year-he did just buy two rather large yachts. Bezos, 3-4B.

        The Liangs own 15% of the company. Vested option(stock) sales are pre planned and would have been approved many months ago. Maybe they need the money. It's irrelevant. As has been noted before, they sold very little when the stock was $120.

        The facts are RSUs attract high taxation(even when unsold) so directors will often sell them to pay the taxes they are liable for whether they sell them or not. Huang has make many large pledges to various charities in the magnitude of 100's of millions so with taxes Im not surprised he needed to cash in some stock.

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        • C Coopersale

          Still going down, under $22 now, when do you think they’ll have some positive news?

          2 Offline
          2 Offline
          2BToo
          wrote on last edited by
          #33

          @Coopersale said in SMCI:

          Still going down, under $22 now, when do you think they’ll have some positive news?

          Closed just above $18 today but down after-hours to mid-$17's. Glad I didn't take a chance and buy some last week.

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          • ? Offline
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            A Former User
            wrote on last edited by
            #34

            I'm waiting for the dip to bottom out and start climbing!

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            • 2 Offline
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              2BToo
              wrote on last edited by
              #35

              I think that quite a lot of people are doing the same, but that dip seems to be mighty low ....

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              • A Offline
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                Adam Kay
                Global Moderator
                wrote on last edited by Adam Kay
                #36

                It's an interesting case study. We were lucky to realise a material profit and even a theoretical price of 'zero' would net 110%. From failing to file accounts on time to this. It appears a bargain today, right? Well, thinking about the implications.

                No access to capital
                Customers cancelling contracts
                Banks calling in debt(potentially). All debt has covennants requiring a 10-k filing. No filing, you are in breach and the loan becomes callable.
                Suppliers withdraw credit
                Top quality staff leave-their options are worthless
                Shareholder law suites(a big concern)
                Real going concern implications

                It is possible to resolve most of the above. Will they? They have not shown any signs of getting their act together, yet.

                The first step is to appoint a new Auditor-a Big 4 Auditor. Most likely PWC. I'm guessing PWC. Before they agree, I would expect their review of the Audit Committee findings (ongoing still), request the CEO/CFO and most of the Board to resign. These imo are red lines. Will they go? Only then will they have a workable plan to convince nasdaq not to delist them. The delisting process is relatively drawn out and the company have two appeals which buys them time. It might take months to appoint new Auditors and get their accounts filed. During this time the rumour mill is driving the stock, more customers leave and banks get nervous.

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                • E Offline
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                  exIM
                  wrote on last edited by
                  #37

                  I believe SMCI has taken many institutional investors by surprise, so no one should feel foolish for having invested in them. Around 20% of SMCI is owned by BlackRock and Vanguard !
                  That said, it's remarkable to see how SMCI is managing these challenges given the potentially serious consequences.

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                  • A Offline
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                    Adam Kay
                    Global Moderator
                    wrote on last edited by
                    #38

                    They obtained a 1.5B loan at ZERO interest from a consortium of banks including JPM/Goldman, convertible to stock at $140. I would think they are less than happy about it too.

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                    • D Offline
                      D Offline
                      dingg
                      wrote on last edited by
                      #39

                      Apparently they(smci) have a plan to announce on Monday to avoid delisting, should put a rocket under the sp, especially if they announce something positive to go with it.

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                      • A Offline
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                        Adam Kay
                        Global Moderator
                        wrote on last edited by
                        #40

                        Hi G,

                        It's a rumour, but even if true it doesn't change anything. Filing a compliance plan was expected. They need to appoint new Auditors.

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                        • A Offline
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                          Adam Kay
                          Global Moderator
                          wrote on last edited by
                          #41

                          There is some chatter on Pistonheads about whether Nasdaq will accept 'the plan' or delist, today. There won't be any delistings today or any time soon.

                          1. If a plan is submitted today the Nasdaq have 30 days to consider it. They can accept the plan they will be granted up to 180 days to comply.
                          2. If they reject the plan, Nasdaq will issue a written statement with their reasons.
                          3. The company has 7 calendar days to appeal. A hearing is then scheduled for between 30 and 45 days, where new information is presented.
                          4. The company has a right of a second appeal and even after that they can appeal again, to Federal Court.

                          Cases of appeals that succeeded being Qualigen in 2021 and Evasion in 2024. In short filing the plan and appealing buys time. As has been said they must sign a new 'Big' audit firm, and in order to do that I would think the CEO/CFO and a few others need to resign.

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                          • 2 Offline
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                            2BToo
                            wrote on last edited by
                            #42

                            ... and it's up nearly 20% today.

                            My 'buy' finger is getting mighty twitchy. Perhaps it's a good thing I don't have any money to go buying with ...

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                            • ? Offline
                              ? Offline
                              A Former User
                              wrote on last edited by
                              #43

                              Problem is, it' a red or black situation, gambling on the chance of a rise into profit or not.....

                              How lucky do you think you are?

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                              • E Offline
                                E Offline
                                exIM
                                wrote on last edited by
                                #44

                                good info Adam, thanks...

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                                • D dingg

                                  Apparently they(smci) have a plan to announce on Monday to avoid delisting, should put a rocket under the sp, especially if they announce something positive to go with it.

                                  D Offline
                                  D Offline
                                  dingg
                                  wrote on last edited by
                                  #45

                                  @dingg said in SMCI:

                                  Apparently they(smci) have a plan to announce on Monday to avoid delisting, should put a rocket under the sp, especially if they announce something positive to go with it.

                                  Announced a new auditor after hours I see

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                                  • R Offline
                                    R Offline
                                    Renmure Jim
                                    wrote on last edited by
                                    #46

                                    Could have been a good gamble

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                                    • A Offline
                                      A Offline
                                      Adam Kay
                                      Global Moderator
                                      wrote on last edited by
                                      #47

                                      I’m sure there will be further volatility but it’s the first positive news in a while. The reaction to signing BDO, a top 5 firm and auditors of much bigger companies, is as expected.

                                      The committee took the view that retaining 3 shares for every 10 held originally was a reasonable and conservative approach given:

                                      1. We booked 138% profit
                                      2. On balance there was no evidence of accounting manipulation as cited even by EY.
                                      3. The rapid appreciation of the stock made them a short/miscreant target.

                                      We don’t feel ‘smart’ and there are many take aways but one thing I can say. This holding was borne from a high degree of research and it received attention constantly. It still does. However this is a case of risk vs reward. This was a case of ‘Hold’ (modest residual balance) vs not a buy or a sell. Simply because there were too many unknowns whilst on balance the business is still very attractive.

                                      Regards

                                      Adam

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                                      • B Offline
                                        B Offline
                                        Beerfinch
                                        wrote on last edited by Beerfinch
                                        #48

                                        Well, having been happy to leave things to the professionals (IM/Cobens) and always firmly in the "investing not trading" camp, I had a sudden rush of blood to the head on Saturday*, downloaded the Trading 212 app and bought some SMCI shares.

                                        It's the first time I've done anything like this and it's a relatively small sum but enough to sting a little bit if it gets completely wiped out.
                                        I must say watching the price change "live" yesterday was quite exciting and I can see how people can get hooked on it and also the risk of chasing losses etc.

                                        For me I think this will be a one-off experiment/fun/gamble and certainly not form part of my investing strategy but looking forward to seeing how things go over the next couple of months.

                                        *no alcohol was involved in this decision 🙂

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                                        • ? Offline
                                          ? Offline
                                          A Former User
                                          wrote on last edited by
                                          #49

                                          Set in your mind a figure to invest and then place part of that amount on the horse, sorry, company selected. if it rises, buy another share or two, if it falls, leave well alone!

                                          T212 offers 5/24 trading currently on SMCI, I managed to sell a little bit earlyish this morning, then watched the price tumble!
                                          It's just gone back to red for me!

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                                          The value of your investments can go down as well as up, and you may get back less than you invested.

                                          Cobens a trading name of Astute Financial Management UK Limited is authorised and regulated by the Financial Conduct Authority. Registered Address: 4th Floor Peek House, 20 Eastcheap, London, EC3M 1EB. Registered in England and Wales No. 5850981.

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