Stock of Super Micro Computer (SMCI) Drops as Nasdaq Compliance and Insider Selling Take Center Stage

Following the data center hardware specialist’s return to compliance with the Nasdaq exchange, two Super Micro Computer (SMCI) officials sought to sell their business shares. Thursday saw a decline in SMCI shares.

Supermicro, a firm in San Jose, California, said on Wednesday that it received a notice letter from Nasdaq stating that it is now in compliance with the Nasdaq listing requirements. After submitting delayed financial reports for the first two quarters of fiscal 2025 and its fiscal year 2024, it is no longer in danger of being delisted. The U.S. Securities and Exchange Commission received such disclosures from Supermicro on Tuesday.

“The matter is now closed,” a news statement from Supermicro stated. On Wednesday, Two corporate officials notified the SEC that they intended to sell SMCI stock. Co-founder, senior vice president, and director Sara Liu wants to sell 46,293 shares totaling $2.31 million in market value. Charles Liang, the chairman, president, and CEO of Supermicro, is Liu’s spouse.

The senior vice president of operations, George Kao, intends to sell 71,720 shares totaling $3.62 million in market value. Both officials are unaware of significant negative information about Supermicro’s business practices that haven’t been made public. SMCI shares dropped 16% on the stock exchange today, closing at 42.95.

George Wang, an analyst at Barclays, reaffirmed his equal weight, or neutral, recommendation on SMCI shares on Thursday, citing a price objective of 59. Previously, he put his rating on hold while the business resolved its accounting and regulatory filing problems.

Wang stated in a client note that although SMCI is a leader in AI servers and direct liquid cooling (DLC). We anticipate it will be among the first to ship (Nvidia) B200 HGX servers in March-Q; its competitive moat is eroding, and its troubled history may limit the P/E multiples investors are willing to pay for the stock.

Even though SMCI is now in compliance with its filings, which should help with business fundamentals like incremental order wins from previously reticent clients, we are still on the sidelines, he continued. Before encountering accounting issues in 2024, SMCI stock was a high flyer. In March 2024, it hit its highest point ever, 122.90.