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Super Micro drops as AI server manufacturer tries to sell shares

Logos of Super Micro Computer are displayed during COMPUTEX Taipei, one of the world's major computer and technology trade fairs, in Taipei, Taiwan May 30, 2023

March 19 (mod1s) - Super Micro Computer (SMCI.O), opens new tab announced on Tuesday it would sell 2 million shares that might fetch roughly $2 billion, sending the AI server maker's shares 11% down. 

The San Jose-based company's shares have more than quadrupled since January, making the selling of equities a profitable alternative to generate capital. 

However, purchasing the shares after their remarkable gain might be dangerous for investors afraid Super Micro would fail to achieve their enhanced expectations.

Super Micro's ability to quickly develop AI-optimized servers and its in-house liquid cooling technology have helped the company turn into a key data center supplier. 

The recent climb in Super Micro's market capitalization led to its inclusion in the S&P 500 index (.SPX), opens new tab on Monday. That implies exchange traded funds that follow the index must now hold Super Micro's shares. 

Following the decrease in Super Micro's price on Tuesday's share-sale announcement, the business might raise around $1.8 billion in the offer.

The corporation raised $1.7 billion last month in a convertible bond issuance to drive commercial development. 

Proceeds from the current offering would be used to acquire inventory, expand production capacity, raise research and development spending and other working capital reasons, the firm said in a regulatory filing with the U.S. Securities and Exchange Commission on Tuesday. 

The company's existing shares would grow to 58.6 million following the offering, it said, adding that the underwriter, Goldman Sachs, has the option to acquire up to 300,000 further shares within 30 days. 


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