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Dell reported earnings last night, meeting expectations. AI server shipments accounted for $2.9B and a backlog of $4.5B. We are not impressed. This is precisely why we did not entertain buying the stock. They are followers in sector, due no doubt to the fact they do not have their own proprietary solution, rather a repackaged white label offering. Dells guide is unremarkable, which also supports our opinion that recent news 'they are taking smci share' is false. Dell shares are very expensive given their net margin and modest growth. We would expect the stock to receive considerable pressure over the coming days and weeks.
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The other thing with Dell-they exaggerate. Not a good thing. When Xai built Collosus, Dell were the first to make very public statements, crowing that they won the deal($5B). Elon Musk then corrected them by saying SMCI is a joint partner. In fact it transpired SMCI supplied 90% of the installation. Xai is currently building Collosus-phase 2 and 'news' out of Taiwan is that Dell has replaced SMCI. There was zero evidence to support this but it pumped Dells stock price higher at the time. Now looking at their guide, there is clearly no material incremental revenue on offer. Second, Dells supplier is in Taiwan, the very source of the 'news'.
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yes, someones head was going to roll. The company embarks on the hire on new executives to strengthen the Board. No misconduct found and no restatement of any financials. Independent Counsel Cooley LLP utilised 50 attorneys and forensic accountants Secretariate Advisors devoted 11,500 hours (the cost!) reviews 9 million documents, conducted 68 interviews and met with EY and Deloitte extensive. The committee found no evidence of bad faith or improper motives. All revenue was recognised properly and there was no evidence of breaches of export controls and the company is fully compliant. Nothing in the short seller report hold water.
Happy days
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The stock is trading up +15% real time
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That Ex, will be determined on operations. In order to meet the demand from Blackwell they need a lot of additional capital. In order to tap those facilities they need the 10-k filing and the 10-K. Feb/March? The business is capable of turning it around. If they do without further drama, the stock in time will follow.
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The short seller should be on the hook for all their costs ….but I guess not
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Difficult call, how big are your balls?
I have a few shares as you will be aware, my next selling point is still not reached...yet!
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Difficult call, how big are your balls?
I have a few shares as you will be aware, my next selling point is still not reached...yet!
@ferret50 said in SMCI:
Difficult call, how big are your balls?
>ChecksDownTheFrontOfTheChinos<
They look to be pretty normal sized. But if the company has a good product and there are no signs of either misconduct or financial irregularities then it looks like a good bet to me. Their shares can command significantly more than they currently do, as we can see from 6 months ago.
I'm very tempted to splash a bit more pocket money on them. An amount small enough for it not to hurt too much if it all goes tits up, but an amount large enough to make checking the share price interesting.
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Well done!
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The company has received a Nasdaq extension, as expected. Happy days.
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Hi Ron,
Nice to see you back
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It's not unexpected given the typical euphoria and likely short covering driving the price much higher in a very short period of time. It is worth noting that JPM, yesterday who have access to senior management across industries, issued a note to say that customers are SMCI are sticking with the company and any rumours that they are losing business is false. We have discussed this too. The company holds some very unique and patented products which are best of breed and as an example. Xai colossus expansion ($6B) being rumoured to have gone solely to Dell just didn't add up. And it too was false. A lot of negative news is coming out of Taiwan and being promulgated by 'rags'. Why? To give Taiwan facilities a boost (Quanta, Foxconn, Will Jaya).
This coupled with the fact that the company can not publish actual financial results until the 10-k/Q filings in February (25th?) next year so what you have is an information vacuum which vested interest will use to their advantage. Our opinion is at these levels the business is still not trading on fundamentals and we are very happy to be holding a modest position in our portfolios. There are of course issues to overcome, namely capital and Blackwell supply delays have probably helped them as they can get their house in order whilst they await large supply in Feb/March.
It is worth noting that Nvidia too have been flat over the past few weeks. However we are bullish on its prospects and the stock trading behaviour is nothing new.
Have a good evening all!
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Quite a rollercoaster at the moment!
