Let’s break the story down to pieces so anyone reading this article can understand, SMCI Super Micro Computers (NASDAQ: SMCI). SMCI saw a sharp drop due to the short seller report published by Hindenburg Research citing accounting abnormalities over profit margins, supply chain interruptions and postponed filing which triggered the first sharp drop.
The SMCI share price was split 10:1 which was trading at close to 50-60, after the Hindenburg released its report “Super Micro: Fresh Evidence Of Accounting Manipulation, Sibling Self-Dealing And Sanctions Evasion At This AI High Flyer” on 27th August 2024.
Before hints of publishing report on SMCI by the Hindenburg Research, the share price was hovering in 60-62 range after the publishing the report the share immediately fell down to 50 range but recovered back up to the range of 56-54. However, after math of the Hindenburg report SMCI pushed for delay in filling a annual 10K report citing a internal audit which triggered the shares dropping to whopping 25% depending on the market but it settled with a 20% drop.
Let’s remove the noise from it!!
The Nasdaq notice has no immediate effect on the listing or trading of the Company’s common stock on the Nasdaq Global Select Market. Under the Nasdaq rules, the Company has 60 days from the date of the notice either to file the Form 10-K or to submit a plan to Nasdaq to regain compliance with Nasdaq’s listing rules. If a plan is submitted and accepted, the Company could be granted up to 180 days from the Form 10-K’s due date to regain compliance. If Nasdaq does not accept the Company’s plan, then the Company will have the opportunity to appeal that decision to a Nasdaq hearings panel.”
So basically they do have about 60-180 days to file 10-K depending on the circumstances!!
Further adding fuel to the fire, Super Micro’s auditor, Ernst & Young, resigned, pointing out issues about governance, transparency, interaction, and internal financial controls within the company. Which triggered a massive fall in share price.
Do you ever wonder who is buying SMCI shares?
Insiders!! why would they buy if there is an internal issue?. Lets check the insider purchasing historically
You can clearly see unless you are blind that 3 insiders have bought 1.5 million shares of SMCI when there is blood on the streets. If you look back the trend has never broken the at least 40K and then after stock plummeting 40% and there is sudden interest among the people who works at SMCI? and its quite a remarkable increase from 40K was the last highest purchases then to 1.5 million?.
WHAT does our AI model say about the future of SMCI Share Price?
Finally It’s a “BUY” recommendation from Bro in Finance
Like the insiders at SMCI our model doesn’t consider this bloodbath to be real!. It’s expecting the share price to rise to 134 by end of 2025 and we believe those insiders are probably going to make a fortune with if the our model prediction is true they are poise to return 378.57%!!. This prediction is not without any error, RMSE is 8.43 it’s mainly due to share splits which we believe is suitable for a long term investor. Our model is act as mean value generator for SMCI it doesn’t consider the noise from street.
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