Super Micro shares dip as AI server maker looks to raise $2 billion through equity sale

By Thomson Reuters Mar 19, 2024 | 7:06 AM

(Reuters) – Super Micro Computer disclosed on Tuesday it will sell 2 million shares that could fetch about $2 billion, sending the artificial intelligence (AI) server maker’s shares 9% lower in trading before the bell.

The San Jose-based company’s shares have more than tripled since January, which makes raising funds through sale of equity a lucrative option.

The gains have outperformed those in Nvidia, which has been behind the relentless AI-led rally in Wall Street this year, thanks to soaring demand for its servers used in artificial intelligence data centers.

The shares have, however, lost 16% in value after declining for three straight trading sessions, and based on their closing price of $1,000.68, the company could raise about $2 billion. The issue price for the secondary offering was not revealed.

Proceeds from the stock sale will be used to purchase inventory, expand manufacturing capacity, increase research and development investments and other working capital purposes, the company said in a regulatory filing with the U.S. Securities and Exchange Commission.

The company’s outstanding shares will increase to 58.6 million after the offering, it said, adding that the underwriter, Goldman Sachs, has the option to buy up to 300,000 additional shares within 30 days.

(Reporting by Akash Sriram in Bengaluru; Editing by Shinjini Ganguli)