Shares of Super microcomputer fell on Tuesday after the company announced a new stock offering, taking part in one of the biggest rallies tied to the artificial intelligence boom.
The company said in a submission On Tuesday morning, the company announced that it plans to sell two million additional shares of common stock, bringing the total number of outstanding shares to over 58 million.
Shares fell 9% on the day.
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“The primary purpose of this offering is to obtain additional capital to support our operations, including the purchase of inventory and other working capital purposes, expansion of manufacturing capabilities and increased investment in research and development (“R&D”),” the filing said.
Goldman Sachs is the underwriter of the new stock offering. Goldman also has the option to purchase up to 300,000 additional shares of Super Micro Computer within the next 30 days.
Super Micro Computer, a technology infrastructure company, has emerged as one of the biggest winners from Wall Street’s appetite for AI investing. The company’s stock had risen more than 900% over the past year before Tuesday’s decline, surpassing that figure Nvidia.
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Recent advances in AI, including large language models like ChatGPT, require greater computing power and data storage. This has led investors to focus on chipmakers like Nvidia and server infrastructure companies like Super Micro Computer as the first wave of beneficiaries.
Super Micro Computer is a fast-growing company, but still relatively small compared to the tech giants that have also seen a stock rally fueled by interest in AI. The company reported fourth-quarter net sales of $3.66 billion, an increase of more than 100% year-over-year. It generated a net profit of almost $300 million. The inventory was added to the S&P 500 earlier this month.
Notably, some Super Micro Computer insiders have sold their own shares in the company in recent months. CEO Charles Liang sold about 1,000 shares in January that were attributed to his spouse. Director Daniel Fairfax has sold 900 shares So far this year on three different days.
According to VerityData and filings, Liang and Fairfax’s sales were part of formal stock sale plans. But also other transactions, including a sale of 5,000 shares by director Sherman Tuan did not appear to be part of such plans.
Director Shiu Leung Chan bought 2,000 shares on February 1, although he resigned Super Micro Computer said the resignation was intended to focus on family business projects and had nothing to do with any disagreements with the company.