Supermicro Surges Beyond Nvidia, Drops 9% on New Share Issuance
Riding the AI rally, the stock price of Super Micro Computer (SMCI), which had been soaring, plummeted 9% following news of a new share issuance. Typically, new share issuances are considered negative for the stock market as they dilute the stock price.
On the 19th (local time) in the New York stock market, SMCI's stock closed at $910.97 per share, down 8.96% from the previous session. This was the largest drop among the 500 stocks included in the S&P 500 index. Following a decline due to profit-taking the previous day, the company’s announcement of plans to issue an additional 2 million common shares through a public offering was seen as the cause of the sharp drop. SMCI is also showing a slight decline in after-hours trading.
SMCI explained the purpose of this new share issuance as "to secure additional capital for corporate operations." Bloomberg reported that SMCI is expected to raise up to $1.75 billion. Goldman Sachs is acting as the lead underwriter for the public offering. Goldman Sachs has been granted an option to purchase up to 300,000 shares within 30 days.
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SMCI's stock price surged about 1000% over the past year following the AI boom. This year alone, the increase has reached 220%, far surpassing Nvidia's 80% rise during the same period. On the 18th, it was also included in the S&P 500 index.
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