Author Topic: SMCI - Super Micro  (Read 11833 times)

oddballstocks

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Re: SMCI - Super Micro
« Reply #40 on: October 18, 2018, 07:02:15 AM »
Thanks for the reply. So it is your take that SMCI motherboards are too unreliable to be used in such setups? That's what I am doubting and that narrative also doesn't seem to match with SMCI revenue over the past few years. But I could very well be mistaken.

There is one reason people go SMCI -> price. Tech is very much a "get what you pay for" world. Pay more, higher quality components. Higher quality could mean better capaciters, better resistors, better chips. Or more thought out design.

You can get 'nice' things at reasonable prices. Flash storage arrays etc. So an IT group will look and say "we can get all-flash from SMCI, or spinning disks from HPE for the same price.  Flash is better and we'll just suck up the lack of support and reliability on our own."  The psychology is the people ordering this stuff want the nicest they can get and budgets are squeezed.

There will always be a market for Kia cars, just like SMCI. A buyer of a Kia knows what they're getting, and I think the analogy holds for SMCI too.
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pcm983

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Re: SMCI - Super Micro
« Reply #41 on: October 19, 2018, 08:06:07 AM »
any thoughts now that we have gotten a bunch more rejections? surprised stock hasn't reacted more here.

https://www.computing.co.uk/ctg/news/3064829/no-evidence-of-chinese-state-attack-on-it-hardware-supply-chain-says-us-director-of-national-intelligence-dan-coats

supposedly earnings next week too - i have the stock trading at mid single digit p/e on ltm earnings.

also any thoughts on timing of accounting restatement?


pcm983

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Re: SMCI - Super Micro
« Reply #42 on: October 19, 2018, 10:46:50 AM »
Apple CEO Tim Cook, in an interview with BuzzFeed News, went on the record for the first time to deny allegations that his company was the victim of a hardware-based attack carried out by the Chinese government. And, in an unprecedented move for the company, he called for a retraction of the story that made this claim.

https://www.buzzfeednews.com/article/johnpaczkowski/apple-tim-cook-bloomberg-retraction

Foreign Tuffett

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Re: SMCI - Super Micro
« Reply #43 on: October 19, 2018, 12:59:08 PM »
any thoughts now that we have gotten a bunch more rejections? surprised stock hasn't reacted more here.

https://www.computing.co.uk/ctg/news/3064829/no-evidence-of-chinese-state-attack-on-it-hardware-supply-chain-says-us-director-of-national-intelligence-dan-coats

supposedly earnings next week too - i have the stock trading at mid single digit p/e on ltm earnings.

also any thoughts on timing of accounting restatement?

Thanks for posting today's news.

Insofar as the accounting restatement goes, the company has been consistently mum about when it might be completed. Obviously it's been a slow process.


writser

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Re: SMCI - Super Micro
« Reply #45 on: October 24, 2018, 02:55:00 AM »
I still think the whole 'spy chip' story is incredibly far-fetched:

- everybody is denying it and even calling for retraction. FBI, DHS, Amazon, Apple, etc.
- weeks have passed and there's still no evidence so far. The chip should have been found by now by random nerds on the internet. No concrete follow-ups from Bloomberg either.
- it would be an incredibly convoluted, expensive, unsure and risky way for the Chinese government to gain access to .... to what actually?
- I think it's actually a very stupid way to 'hack' because, once the secret has been spilled, it would immediately give away who is doing it and would be very easy to detect / circumvent.

It doesn't make sense on so many levels. I think it's way more likely the Bloomberg article is overblown / incorrect, even if that in itself is highly unlikely.

Yet the story is so powerful, has the perfect villain to scare US investors and has such a big impact if true that the market seems to assign way too much value to it. The only question is: what is the upside? I'm not sure how to value the company (which is why I only have a very small position and why I probably shouldn't own it in the first place). Book value doesn't seem to be the most useful approach but I also have a hard time predicting future earnings / cashflow. I'm basically in it for the spy chip drama, not for the 'hope they get-up-to-date-with-financials-and-have-good-results-in-2019' drama. Also, regarding upside: SMCI was already trading below $17 in May this year - before any of this happened .. And regardless of whether the spy chip exists or not, surely this story can't be good for business. So I don't mind selling opportunistically - I could be completely wrong about the spy chip as well. At what level I'm not quite sure yet.

After the storm has blown over Nate can buy my shares and make the easy money.
« Last Edit: October 24, 2018, 03:04:07 AM by writser »
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Liberty

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Re: SMCI - Super Micro
« Reply #46 on: October 24, 2018, 06:31:53 AM »
Not to mention that there's been enough time for other journalists and security researchers to look for those chips and they would've found them by now. I saw somewhere (forget where..) that the WaPo and NYT both trying to corroborate the story but got nowhere. I also think that it would be a good way for a security consulting firm to make a name and get lots of PR if they came out with more details on the chip or confirmed it, yet I haven't seen anything yet. In fact, security experts interviewed by Bloomberg for background research on the story seem skeptical because lots of speculative things he said were claimed by the story as exactly what the supposed chip did.
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oddballstocks

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Re: SMCI - Super Micro
« Reply #47 on: October 24, 2018, 07:06:39 AM »
After the storm has blown over Nate can buy my shares and make the easy money.

Ha!!

The story is weird. It's very possible it's true. And I say this from what I'd seen 15 years ago when I worked at a startup that focused on security. We hired hackers, found exploits, were paid to break into networks, and then managed said networks. Some of the hardware devices back then were almost unbelievable.  So on that front I can see this.

But there are other threads to the story that don't make sense. Given SuperMicro's history, why go to all the lengths when the core boards are already vulnerable? I mean it's like a spy movie where there is some super secret plan to break into a building with ladders, ropes, secret gadgets when in the end the front door is wide open, not just unlocked, but wide open with no one home.

I know I've railed on the quality, but there is a place for that.  There is a huge market for low end machines by budget conscious companies.

I guess the question is what does the restatement bring, and will it drift cheaper?
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writser

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Re: SMCI - Super Micro
« Reply #48 on: October 26, 2018, 11:28:56 AM »
https://apple.slashdot.org/story/18/10/26/1719225/amazon-has-pulled-ads-from-bloomberg-over-controversial-big-hack-chinese-spy-story-apple-has-not-invited-outlets-reporters-to-a-product-event-next-week

Quote
Amazon pulled its fourth quarter advertisements on Bloomberg's website, a move some within the media giant think is retribution for its controversial story alleging that Chinese spies hacked into the online retailer's servers. According to a source in position to know, Amazon's digital media buyer, Initiative, informed Bloomberg's sales staff on October 16 that it would cancel its ad buys for the fourth quarter due to budget cuts. Internally, the source said, the staff received that decision, made only eight days after a previous communication with Initiative confirming that the ads would run, as a direct response to Amazon's displeasure over the October 4 story. (Amazon announced Thursday that its marketing expenses for Q3 2018 were 3.3 billion dollars, up more than 800 million dollars from the year before.) [...] According to multiple sources, Bloomberg was not invited to Apple's fall product event next week in Brooklyn.

Tech giants still angry over false accusations. Or: deep state cover-up continues?
« Last Edit: October 26, 2018, 11:31:07 AM by writser »
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writser

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Re: SMCI - Super Micro
« Reply #49 on: November 16, 2018, 05:45:15 AM »
SupermicroŽ Announces First Quarter Fiscal 2019 Preliminary Financial Information and Decision to Restate Prior Period Financial Statements: link

Quote
The Company expects to report the following financial results for the quarter ended September 30, 2018:

* Net sales in a range of $952 million to $962 million compared to its previous guidance range of $810 million to $870 million

* GAAP and non-GAAP gross margin in the range of 13.2% to 13.4%

* GAAP fully diluted earnings per share in the range of $0.35 to $0.39; non-GAAP fully diluted earnings per share in the range of $0.66 to $0.70

* Cash flow from operations of $50 million and capital expenditures of $4 million

[..]

As of September 30, 2018, total cash, cash equivalents and short-term investments was $104.1 million and bank debt was $79.6 million.


Conference call transcript: link

Quote
Super Micro had a strong first quarter of revenue in net profit. As Charles mentioned, we estimate first quarter revenue within the range of $952 million to $962 million. It was approximately 40% higher year-over-year and above our guidance range of $810 million to $870 million. We grew revenue in all market verticals with key markets growing significantly year-over-year. Global 2000 grew approximately 130% year-over-year. Internet Data Center grew approximately 150%, while non-Internet Data Center grew approximately 95% year-over-year.

Accelerated computing was up 26% and Embedded grew approximately 30%.

On a year-over-year basis, the U.S. enjoyed the highest growth at nearly 45%, followed by EMEA that grew nearly 50% and Asia Pac that was up approximately 30%.

Quote
For the first quarter, we estimate cash generated from operations was $50 million. After deducting CapEx of $4 million, we estimate free cash flow of $46 million for the first quarter.

Market cap: ~600m.
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