The stock that caught my attention last November 2024 was Super Micro Computer, Inc (SMCI) when the stock plunged dramatically from $122 quoted in March 2024 to $17 in December 2024.
Super Micro Computer, Inc. is a global technology company that designs, develops, and manufactures high-performance server and storage solutions and has been working side by side with the magnificent seven as NVIDIA, AAPL, META, AMD, and many other technology companies to keep up the demand for the construction of data centers, cloud, IoT, and artificial intelligence evolution. It is one of the main big players not only in the U.S. but also worldwide in the computer era and, because of that, its stock boosted significantly since 2023. However, right after SMCI was added to the S&P 500, the price of shares started dropping and became the every shorter's target to bring the price down to less than one-tenth of the $122.
The reason and some accusations of the fall were described in the previous blog (Purchased SMCI On The Market Error). However, any of the concerns and accusations were confirmed otherwise by the special committee and newly hired accountant corp, BDO. There was nothing wrong with the company's governance, transparency, and internal control over financial reporting.
Truthfully, this short attack was a part of the game for Hindenburg Research. They shorted at the top and made profits by creating volatile market conditions and making the investors anxious to leave the company. Their strategy successfully succeeded. In August 2024, Hindenburg Research (a short-selling firm) released a report alleging accounting manipulation and export control violations by Super Micro Computer, Inc. (SMCI). Following these allegations, Hindenburg disclosed that it had taken a short position against SMCI's stock.
This is the moment you need to look into the matter and find out the truth on your own while everyone is guessing. Anyway, after due diligence, I started purchasing the stocks at between $23-28 in November and December 2024 and waited for the price to return. As soon as shorters were convinced that they were in the wrong position on 2/3/2035, it turned around and shot up from $25.71 to $66.44, which was quoted today on 2/21/2025. It took only 2 weeks.
On this date, I sold all and closed the position at $64.
Remember whatever comes up fast, comes down fast. This can be said to the opposite.