SMCI Co-Founder Cashes Out Millions In Stock A Day After Super Micro's Delayed Filings

Top executives at Super Micro Computer Inc. SMCI have sold millions of dollars worth of company stock after the company managed to meet the deadline for overdue financial filings.

What Happened: Super Micro’s Co-founder and Senior Vice President, Sara Chiu-Chu Liu Liang, sold 46,293 shares for a total of nearly $2.3 million, leaving her personal holdings in the company at zero. In a similar move, George Kao, Senior Vice President of Operations sold 71,720 shares, valued at nearly $3.6 million. As per regulatory filings, both transactions took place on Feb 26, a day after SMCI completed the delayed filings.

Notably, both Kao and Liang received thousands of restricted stock units this week, a type of equity compensation that will vest over the next four years. Sara Liang, also the wife of CEO and co-founder Charles Liang, has an indirect stake of over 67 million company shares through her husband’s holdings.

According to a report in Fortune, the CEO received 1 million stock options this week for achieving a revenue target. The award was originally granted in November 2023 and consists of 5 million shares, divided into five tranches, which will be distributed as the company meets its revenue and stock price milestones.

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Why It Matters: The timing of these stock sales is interesting, coming just as Super Micro Computer Inc. disclosed its delayed financial results on Tuesday. The submission of revised and audited financials for fiscal 2024 and the first half of fiscal 2025 to the U.S. Securities and Exchange Commission (SEC) helped the company avoid a potential delisting from Nasdaq. This move also re-established Super Micro’s compliance with Nasdaq's filing requirements, providing some relief to investors.

Analysts also feel that the company has regained its lost ground by ensuring its financial compliance.  Vijay Rakesh, analyst at Mizuho Securities reinstated coverage of SMCI stock and raised its price target from $45 to $50. Barclays analyst George Wang also reinstated coverage of SMCI with an Equal Weight rating and a price target of $59. However, in a note to investors, Wang cautioned that the company’s “competitive moat is shrinking and it’s checkered past could limit the P/E multiples investors are willing to pay for the stock,” as per Business Insider.

After surging in the run upto the filing deadline, SMCI stock plunged nearly 28% in the period between Feb 25 to Feb 28.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.