Super Micro Computer (NASDAQ:SMCI) announced on Tuesday its intention to sell 2 million shares, potentially raising around $2 billion, causing shares of the artificial intelligence (AI) server manufacturer to drop by approximately 12%.
The San Jose-based company has seen its shares surge by over threefold since January, making the sale of equity an attractive option for raising funds.
Super Micro’s stock gains have surpassed those of Nvidia, which has been a driving force behind the ongoing AI-driven surge in Wall Street this year, fueled by increased demand for its servers utilized in AI data centers.
The company’s rapid development of servers crucial for generative AI applications, coupled with its proprietary liquid cooling technology, has positioned it as a significant supplier in the industry.
Super Micro’s market value surge led to its recent inclusion in the S&P 500 index (.SPX), expanding its investor base. However, its shares have experienced a 16% decline over three consecutive trading sessions.
Based on the closing price of $1,000.68, the company could potentially raise about $2 billion through the equity sale, although the issue price for the stock offering was not disclosed.
Last month, Super Micro raised $1.73 billion through a convertible bond offering aimed at supporting business expansion.
Proceeds from the latest equity offering will be allocated towards purchasing inventory, expanding manufacturing capacity, boosting research and development investments, and other working capital needs, according to a regulatory filing with the U.S. Securities and Exchange Commission on Tuesday.
The company noted that its outstanding shares will increase to 58.6 million following the offering, adding that the underwriter, Goldman Sachs, retains the option to purchase up to 300,000 additional shares within 30 days.
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