What's Going On With Super Micro Computer Stock?

Super Micro Computer, Inc. SMCI shares are trading lower Friday after the company announced a private offering of convertible senior notes. Here's a look at what's going on.

What To Know:

Super Micro announced the pricing of $1.5 billion aggregate principal amount of convertible senior notes due 2029 early Friday. The convertible notes have an initial conversion rate of 0.7455 shares of the company’s common stock per $1,000 principal amount of convertible notes, equivalent to an initial conversion price of approximately $1,341.38 per share, representing an initial conversion premium of approximately 37.5% above the closing price of $975.52 per share of the stock on Feb. 22. 

The company also granted a 13-day option to the initial purchasers to purchase up to an additional $225 million aggregate principal amount of the convertible notes.

Super Micro Computer shares took off at the end of January following a better-than-expected earnings report from the company, gaining nearly 100% in the last month alone and more than 200% year-to-date.  Super Micro's stock also appears to be riding the wave of AI excitement, increased interest from retail investors and buzz on social media. 

Related News: Booking Reports Q4 Results: Earning Beat, Revenues Beat, Initiates Dividend

Is SMCI A Good Stock To Buy?

An investor can make a few decisions when deciding whether a stock is a good buy. In addition to valuation metrics and price action which you can find on Benzinga's quote pages – like Super Micro Computer‘s page for example – there are factors like whether or not a company pays a dividend or buys a large portion of its stock each quarter.

These are known as capital allocation programs. Super Micro Computer does not pay a dividend, but obviously has a few ways it can return value to shareholders. Feel free to search Benzinga's dividend calendar for the next company that is due to pay a dividend and determine what kind of yield you can earn for holding a share of the company.

For example, if you're looking to earn an annualized return of 24.17%, you'll need to buy a share of HORIZONS HIGH INT SVGS ETF UNIT CL A by the Feb. 29, 2024. Once done, you can expect to receive a nominal payout of $0.20 on March 7, 2024.

Buyback programs are obviously different and highly variable. A company can approve a buyback program and purchase shares as it sees fit over the course of time in which the buyback was authorized. Looking through the latest news on Super Micro Computer will often yield whether or not the company has approved a buyback program recently. Buyback programs usually serve as a support for share prices, serving as a backstop for demand.

SMCI Price Action: According to Benzinga Pro, Super Micro Computer shares are down 10.4% at $873.98 at the time of publication.

Image: Courtesy of Super Micro Computer, Inc.