Super Micro Computer (SMCI)

SMCI has decided to replace the CFO and add more senior legal leadership. It says it will not need to restate any prior issued financials. This is also positive. But...the company did not specifically affirm guidance. Customers certainly may have backed off on purchase orders, so for the moment we would not rely on projections. The stock is very cheap and momentum and short covering will likely take it higher. But we will be more comfortable when we actually see a reported quarter which shows growth has not been negatively impacted by recent events. 
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It was set up really well with explosive growth and accelerating revenue and earnings. But the auditor quit and they haven't solved the numbers. At 5 i they feel that if the auditor quits then it is time to get out.

Auditor resigned, never a good sign, he'd never invest during accounting uncertainty. Stock dropped further. Merely a distributor. When something in the value chain doesn't actually add value, be wary of long-term prospects. Too risky.

Instead, invest in one of the majors making the chips such as NVDA, QCOM or AMD.

Their board did a review and found nothing wrong. Well, their accountants resigned for a reason, didn't they? Besides, it's the regulator's job to do a review. Shares keep sinking.

Is down over 30% today because their auditor quit, but still 41% in the past year. Don't touch this. Their delay on filing their 10K calls into questions the validity of the financials, showing a lack of corporate governance. Don't catch this falling knife.

Doesn't mind nibbling here if we do have some upside until the end of the year. Just as long as you have the discipline to limit your risk near recent lows. If it moves below those lows, take off the position. A trade, since we're late cycle and we're rotating away from info tech. This could be a source of funds for investors, and so head lower.

It is much too volatile for them.

Stock price has almost been halved, so it has good value down here. Its technology is state of the art. Litigation problems are focused on management and accounting irregularities; an overhang that keeps him away. Whereas litigation of those in the Mag 7 is par for the course due to their various monopolies.

It is highly volatile and has not recaptured the rally. It has been added to the S&P 500 and is splitting 10 for 1 on October 1. Generally speaking the stock price goes down after a split.

Tough business as components that go into product are supplied from 3rd parties. Very hard to earn profits with this fragile business model. Would not recommend investing. 

He agrees. Don't catch a falling knife now. Can't defend SMCI fundamentally. He bought this in late July but momentum flipped to the negative in August. 

Massive runway. He doesn't own it, mainly because of volatility and he prefers others. Buy in stages under $500, around $520, and then $547. Its scary chart won't happen to NVDA because SMCI has a market cap of only $32B.

Taking a hit today off of earnings. Peaked around $1200, struggled to stay above $900, and now the bottom is still falling out. Watch to see if any support around $500. Weak technically, under pressure.

With this kind of chart that moves so much, you have to think more like a trader than an investor.