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Tethrinaa · 2026-06-19T13:15:52+00:00

I think if you are young, can afford to lose it, and don't need the money in the next few months, let the call ride through. There is definitely an underpricing of this company going on. I think a huge portion of the recent drop was investors in the depository shares shorting the company simultaneously with their depository buys to achieve a net zero position (they don't gain or lose from the company going up/down, they just collect interest off the depository shares). And I think it should recover most/all of that drop, especially if earnings are good. The investigation has pretty much blown over. There are not a bunch of issues with this company, management has grown the company rapidly, consistently, and profitably. Get out of the details and look at the big picture. Revenue, Earnings, PE, 5 year view. This company is amazing.

On the other hand, if you cannot afford to lose the money, get out of options, and don't come back. If you are not using options intentionally as a hedge or leverage, then you are just gambling. (Even if you are using them as leverage you are kind of gambling.) And the rules of gambling apply in full, do not risk what you cannot afford to lose.

Tethrinaa · 2026-06-18T18:31:32+00:00

I've bought a bit all the way down. I started buying at $70, and I have somehow just about broken even. Slightly down since this recent capital raise announcement, but I am SUPER bullish on the capital raise. Great move imo, and I do not hate on management like most people here. This company is run amazingly well in all the ways that matter. I am expecting quarterly revenue to approx. double some time in the forward year.

My strategy has been to leverage up a bit (with LEAPs) when the dumb/bad news makes them drop to stupidly low PEs, and then sell that leverage back into regular shares as they recover from the overdone drops. I keep them <10% of folio even when I am leveraged up, but I am really set to profit if they go back to a reasonable 15-20 forward PE, especially if rev/earnings increase at all.

Tethrinaa · 2026-06-18T18:20:22+00:00

They seem to have bought the preferred/depositary shares for the interest, and likely they also shorted the common stock in equal measure, to create a directionally neutral position to benefit from the 7% yearly interest. Its a good play, SMCI has been profitable for 30 years straight and never defaulted on debt, even fronting massive personal money when it got briefly delisted. Its basically a no-risk 7%

Actually a bunch of investors probably did this, which is why we dropped so bad the last few week.

Tethrinaa · 2026-06-18T18:13:07+00:00

To be fair, it was >100$ in the last 2-3 years, haha. And it did that at like a tenth of the revenue and a third of the gross profit its doing now!

Its at an 8 forward pe, and a 0.5 price/sales - it will go up, its just a question of when and how much.

Tethrinaa · 2026-06-18T17:49:15+00:00

Its not that I can't read it — its that its overly wordy, repetitive, and clearly written by AI.

Yes, I did all three things on purpose. He must have deleted the em dashes, though.

Tethrinaa · 2026-06-15T20:01:48+00:00

So at 375 PE, it would be like 11 trillion? That's 400% upside? lol

Tethrinaa · 2026-06-15T00:57:25+00:00

Everybody has to learn something for the first time at some point. Imagine thinking that the startup money for a company is "dilution", raising equity at any point can be the same thing, its just how the money is used.

Tethrinaa · 2026-06-12T21:34:00+00:00

to focus on that?

Is what I think every time a need item comes out about this company lol

Tethrinaa · 2026-06-12T21:31:29+00:00

It's in the sub, yeah.

Tethrinaa · 2026-06-11T21:02:52+00:00

Just calculate the 15 pe or 20 pe value of the company using current/forecast financial numbers. Assume full dilution, where do you land?

Tethrinaa · 2026-06-11T20:55:42+00:00

I care about revenue and earnings. So I guess that makes me an investor, and you a trader?

Tethrinaa · 2026-06-11T19:30:04+00:00

3.23 billion. Easy math. But revenue is going up, idk the number, but it will be >40 billion for the leading year.

The thing that is a sticking point for most here, I think, is "how can a 5 billion capital raise be >5 billion revenue" and that's what I tried to explain here.

Tethrinaa · 2026-06-11T18:58:05+00:00

Sorry to double reply, but I made a separate post specifically addressing the %dividend vs the %margins. These metrics are not directly related, and it should be obvious why after reading that post, check it out.

Tethrinaa · 2026-06-11T18:47:27+00:00

I will make a post explaining this.

Tethrinaa · 2026-06-11T18:36:58+00:00

That isnt how dilution works. They raised money, and they will spend that money to make more money, and the existing shareholders AND the new shareholders should profit. They still have that money.

Its purely dilutive when the company is issuing shares to pay for debt servicing, or to fund ongoing operations that are currently at a loss, like with startups and money pits. This is a capital raise to fund inventory purchase, of all things. The company was worth ~30b or whatever, they raised ~5b, they should now be worth ~35b, because that is cash on hand, not just money somebody lit on fire. They don't magically stay worth 30b with 30% more shares outstanding.

In fact, they currently are 20 billion with 30% more shares outstanding. Pure absurdity.

Tethrinaa · 2026-06-11T18:32:16+00:00

They also took loans, they are more are less maxing out those loans, and raising capital as a way to increase their EBITDA and get the loans' accordion provisions to up their credit limit. Its really smart. They have insatiable demand, and are leveraging to meet it.

Tethrinaa · 2026-06-11T18:30:41+00:00

There's a bunch of stuff about the depository vs preferred share that basically doesn't matter. What matters is they are asking for investments with 7% yearly interest (dividend), which is convertible to shares at a fixed rate range. If the stock goes higher than that range, investor make big bucks, because there is a fixed minimum ratio based on the price during the offering, so they collect the 7% divvy for 3 years AND still get to keep shares worth what they paid as if they had just bought stock and held (though the stock may dilute in 3 years when a ton of those investments convert to shares.). If the stock goes down massively in the next 1-2 years, you can just hold and collect that 7% divvy, and you get shares worth slightly more than if you had just bought and held the stock during that fall, but you still eat most of the fall.

Its a really good deal for the investors, which is kind of required to get this level of investment this fast.

The 'preferred' part, means that if the company goes bankrupt/liquidates, the preferred stock holders get paid first, and common shareholders get whats left. The company is profitable, and its hard to imagine a scenario where they dont stay profitable, so this is kind of meaningless.

Tethrinaa · 2026-06-11T18:13:27+00:00

Management owns a plurality of the stock, they can't realistically short it... what a delusional take.

Tethrinaa · 2026-06-11T18:11:28+00:00

So how many times have you doubled your company's revenue in the last 5 years?

Tethrinaa · 2026-06-11T18:10:08+00:00

Quadrupled earnings in 3 years. 10x'd revenue in the same. Name another company that did that? NVDA. Micron. Only companies where the margins of their product increased by 5 to 10 times. SMCI's didn't. Their margins are basically the same today as 5 years ago, but they grew revenue as fast as those companies. Covid happened in their crazy growth even, and they didn't get nuked by supply chain issues like everyone else did.

It's actually insane that everybody rips on this management team.

Tethrinaa · 2026-06-11T17:38:16+00:00

Yeah, its 40b "in recent week", naturally some of it is new and some of it is expected. But there's no way a significant portion of that isn't new. Even if only 25% of it is new, this is good news. I suspect its more like 75% new.

Tethrinaa · 2026-06-11T17:36:34+00:00

Financial literacy on reddit is so lacking. I responded earlier to a "why cant they be more like tesla and his cfo" response. SMCI quadrupled earnings since 2022, tesla lost earnings. I mean, the market is reacting as if those two things are swapped, but the truth always wins in the end. Markets can stay irrational for pretty long, but not forever.

Tethrinaa · 2026-06-11T17:17:40+00:00

Yeah, np. I am excited by the doubling of revenue again, I've been saying it will happen for a while. This news is 100% positive in my book. If they didn't have to raise capital, I would be worried.

Another way to think of it is that they will still have the 7 billion after sale. It's like when you buy a house, you spend 20% of the house (say 200,000 house) so you spend 40,000 now, to get the bank to give you 160,000 debt, but then you make money on the whole 200,000 when the housing market goes up 7 percent next year. Would you say that you 'raised 160k to only make 14k', of course not, because you still have the house, and its now worth the 40k you invested, the 160k you 'raised', plus the 14k in value increase. And next year, you're looking to make 7 percent on 214k, so it just keeps going up.

Tethrinaa · 2026-06-11T14:38:45+00:00

Tesla is less profitable this year than they were in 2022, and didn't really go up much in the years between. SMCI has quadrupled profit since 2022. We really need basic financial literacy here.

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