SUPER MICRO COMPUTER INC fell 7.5% premarket after dropping 6% in previous trading day.
Wondering where Super Micro Computer's stock is heading? It might be helpful to look at the shares' journey to this moment.
The stock market tends to have a short memory, focusing more on the future than the past. However, sometimes a glance backward can be useful, educating even, when the present begins to resemble the past.
Such is the case for Super Micro Computer, the battered server maker that has found itself the talk of Wall Street. The company has dealt with no end of issues lately, from deteriorating profit margins to a short seller report to a 10-K filing delay to its accounting firm resigning.
Shares have plummeted a startling 83% from their all-time high of $118.81 notched in March, a level reached after it became an artificial intelligence darling because it made servers that used Nvidia's chips.
"The stock has made a round trip all the way back to the lows from late '23," Katie Stockton, founder of Fairlead Strategies, told Barron's. It is worth watching to see if the stock can sustain that level, especially if negative news hits, she added, "because it would suggest that there is some support here."
Investors are in dire need of good news, and at this point, it is a race against the clock. After delaying the filing of its 10-K for the fiscal year ended June 30, Super Micro has until Nov. 16 to submit a plan to the Nasdaq Stock Exchange to regain compliance with listing rules.
This isn't unfamiliar territory either. The stock was delisted in August 2018 before being re-listed in 2020.
A further decline, however, would break support and it's unclear where the shares might land. "As of right now, trying to pinpoint a level is like trying to catch a falling knife, which I don't think anyone wants to do with a name like this, especially with the news being basically one-sided, on a negative side right now," Frank Cappelleri, founder of CappThesis, told Barron's.
Expect it to get worse before it gets better.
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