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SAN JOSE - Super Micro Computer, Inc. (NASDAQ:SMCI), a technology powerhouse with a market capitalization of $27 billion and impressive revenue growth of 82% in the last twelve months, announced Monday its intention to offer $2 billion in convertible senior notes due 2030 to qualified institutional buyers under Rule 144A of the Securities Act. According to InvestingPro analysis, the company maintains strong financial health with a "GREAT" overall score.
The company plans to grant initial purchasers an option to buy up to an additional $300 million in notes within a 13-day period from issuance, according to a press release statement.
The notes will be senior, unsecured obligations with semi-annual interest payments and a June 15, 2030 maturity date, unless earlier redeemed, repurchased or converted. The initial conversion rate, interest rate and other terms will be determined during pricing negotiations.
Supermicro expects to enter into capped call transactions with financial institutions to reduce potential dilution to common stock upon conversion of the notes. These transactions may impact the company’s stock price as counterparties establish hedging positions.
The company intends to use part of the proceeds to fund the capped call transactions and up to $200 million to repurchase shares from note purchasers in privately negotiated transactions. The remainder will fund working capital for growth and business expansion.
The notes and related common shares have not been registered under the Securities Act and may not be offered or sold in the United States without registration or an applicable exemption.
Supermicro is a Total IT Solution Manufacturer specializing in AI, Cloud, Storage, and 5G/Edge technologies. The company designs and manufactures its products in the US, Taiwan, and the Netherlands. For detailed insights into SMCI’s growth potential and comprehensive analysis, access the full Pro Research Report, available exclusively on InvestingPro, along with 12 additional ProTips and extensive financial metrics.
In other recent news, Super Micro Computer announced the launch of new GPU solutions featuring AMD Instinct MI350 series GPUs, designed to enhance AI workloads with increased memory capacity and performance. The company also expanded its portfolio of NVIDIA Blackwell Architecture solutions to the European market, offering over 30 new systems for enterprise AI deployments. At its Annual Meeting of Stockholders, Super Micro approved amendments to its 2020 Equity and Incentive Compensation Plan, increasing available shares for awards to 103 million and updating whistleblower protection language. Additionally, two Class III directors were elected, and BDO USA, P.C. was ratified as the independent registered public accounting firm for the fiscal year ending June 30, 2025.
Super Micro Computer is also planning to expand its production capacity in the U.S. to meet the growing demand for AI, with potential sites in Mississippi and Texas. Mizuho Securities recently increased its price target for Super Micro shares to $40, citing the company’s strong position in the AI server market and growth potential from its DataVolt partnership. However, Mizuho maintained a Neutral rating, acknowledging challenges such as increasing competition and weak margins in the AI server market. These developments reflect Super Micro’s strategic initiatives and market position amid rising global AI demand.
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