Supermicro prices $2 billion convertible notes due 2030

SAN JOSE - Super Micro Computer, Inc. (NASDAQ:SMCI), a prominent player in the Technology Hardware industry with a market capitalization of $24.4 billion and exceptional financial health according to InvestingPro analysis, announced Monday the pricing of $2 billion in convertible senior notes due 2030, with an option for initial purchasers to acquire an additional $300 million in notes.

The notes, offered to qualified institutional buyers under Rule 144A of the Securities Act, will not bear regular interest, and the principal amount will not accrete. They will have an initial conversion rate of 18.1154 shares per $1,000 principal amount, equivalent to a conversion price of approximately $55.20 per share, representing a 35% premium above Monday’s closing price of $40.89. According to InvestingPro data, the company has demonstrated remarkable growth with revenue increasing by 82.5% over the last twelve months.

Supermicro expects to receive approximately $1.96 billion in net proceeds from the offering, which is scheduled to close on June 26, 2025. The company plans to use $158.4 million to fund capped call transactions, approximately $200 million to repurchase about 4.9 million shares of its common stock, and the remainder for general corporate purposes including working capital for growth. With a strong current ratio of 6.66 and operating with moderate debt levels, the company maintains a solid financial position to support its expansion plans.

The notes will be redeemable at Supermicro’s option on or after June 15, 2028, subject to certain conditions. Holders will have the right to require the company to repurchase their notes upon the occurrence of a fundamental change at 100% of principal amount plus any accrued interest.

In connection with the offering, Supermicro entered into privately negotiated capped call transactions with certain financial institutions to potentially reduce dilution upon conversion of the notes. The cap price of these transactions is initially $81.78 per share, representing a 100% premium above Monday’s closing price.

The information is based on a press release statement from the company.

In other recent news, Super Micro Computer announced a $2 billion convertible senior notes offering due in 2030, with an option for an additional $300 million in notes. The proceeds will be used for capped call transactions and share repurchases, as well as funding working capital for growth and expansion. In another development, Supermicro introduced new AI solutions featuring AMD Instinct MI350 GPUs, designed to enhance AI training and inference workloads with improved memory capacity and performance. The company also expanded its NVIDIA Blackwell Architecture solutions to the European market, offering over 30 systems for enterprise AI deployments. This expansion includes liquid-cooled systems with enhanced cooling technology to support high compute density. Additionally, Supermicro held its Annual Meeting of Stockholders, where key proposals were approved, including amendments to the 2020 Equity and Incentive Compensation Plan and the election of two directors. The amended plan increases the total number of shares available for awards and updates whistleblower protection language. The appointment of BDO USA, P.C. as the independent registered public accounting firm was also ratified.

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