TLDR
- Super Micro Computer (SMCI) stock fell 16% after two officers filed to sell shares
- Supermicro regained compliance with Nasdaq listing rules, avoiding delisting threat
- Sara Liu and George Kao plan to sell shares worth $2.31 million and $3.62 million respectively
- Barclays reinstated a neutral rating with a $59 price target
- The stock decline follows recent analyst coverage expressing concerns about competitive position
Super Micro Computer (SMCI) stock dropped 16% on Thursday after two company officers filed to sell shares following the resolution of the company’s Nasdaq compliance issues.
The San Jose, California-based company, commonly known as Supermicro, announced on Wednesday that it had received notification from Nasdaq indicating compliance with listing rules.
This compliance milestone came after Supermicro filed delayed financial reports for its fiscal year 2024 and the first two quarters of fiscal 2025 with the Securities and Exchange Commission (SEC) on Tuesday.
“The matter is now closed,” Supermicro stated in its news release, addressing concerns about potential delisting that had been weighing on the stock.
Following this announcement, two company officers filed notices with the SEC regarding plans to sell SMCI stock.
Sara Liu, co-founder, senior vice president and director, filed to sell 46,293 shares with a market value of $2.31 million.
Liu is married to Charles Liang, who serves as Supermicro’s chairman, president and CEO.
George Kao, senior vice president of operations, filed to sell 71,720 shares with a market value of $3.62 million.
Both officers stated they were not aware of any material adverse information related to Supermicro’s operations that hasn’t been publicly disclosed.
On Thursday, Barclays analyst George Wang reinstated his equal weight rating on SMCI stock with a price target of $59.
Wang had previously suspended his rating while the company addressed its accounting and regulatory filing issues.
In his client note, Wang acknowledged Supermicro’s leadership position in AI server and direct liquid cooling markets, noting the company was expected to be among the first to ship Nvidia B200 HGX servers in the coming quarter.
However, the analyst expressed concerns about Supermicro’s competitive position, stating, “We believe that its competitive moat is shrinking and its checkered past could limit the P/E multiples investors are willing to pay for the stock.”
Wang added, “We therefore remain on the sidelines despite SMCI now being compliant with its filings, which should help with business fundamentals, such as incremental order wins from customers who were previously hesitant.”
The stock was trading flat Thursday before declining sharply in the afternoon session.
Broader tech sector weakness adds to sell pressure
Market observers noted that broader tech sector weakness may have contributed to the selling pressure on SMCI.
Supermicro stock had been a strong performer until accounting concerns emerged in 2024.
The stock reached its all-time high of $122.90 in March 2024, before beginning a prolonged decline amid financial reporting concerns.
With its delayed reports now filed without major restatements of previous results, Supermicro has cleared a critical hurdle in rebuilding investor confidence.
Despite the selloff, Barclays’ price target of $59 suggests potential upside of approximately 31% from current levels.
The stock closed Thursday’s session at $42.95, representing a significant discount from its 2024 highs.
Investor focus will likely now shift to Supermicro’s future financial performance and its ability to maintain its position in the competitive AI server market.
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