SMCI $43.13
When I first came across Super Micro, they were at the top of their game. As I looked to get involved with the AI craze, the two stand out stocks were Nvidia and Super Micro. It seemed like a match made in heaven. Nvidia was the top chip maker and Super Micro made a box to put the chips in, that had a distinct advantage. They used water cooling and Nvidia chips needed a lot of cooling.
Both stocks were priced around a thousand dollars, and both had announced a 10 to 1 split coming up shortly. I wanted to see what the effect was of the split, and I decided that I would buy 1 share of each, one before the split and one after the split buying 10 shares to match. I funded my brokerage with $2000.00 to handle it.
That was when all hell broke loose. Super Micro had some discrepancy in their financial reporting. As more and more information came out, their stock price went down, and down, and down. I watched over the next several days as the stock dropped. Since I knew that it was going to have a 10 to 1 split, I decided that I would wait till the stock got below 500 to buy it.
I bought the one share of Super Micro, before the split, for 431.30 and waited for Nvidia to split before buying it. Since my test was now hosed, so I just looked at it as regular stock purchases. For a while, Super Micro did better, but bad news just kept happening. Besides the financial struggles, there were other problems too and their stock began to slide.
I still think they have a chance to pull this out, but they need to concentrate and I’m not sure of the management team there. But at this point, if I sell, I will lose money, so I am holding on. Besides, I think the Super Micro box is superior to the other choices out there, but Nvidia may have some other thoughts on that. It kind of looks like they are searching for alternatives. We will see.
