Super Micro Computer Announces 10-for-1 Stock Split. Here’s What Investors Need to Know.

Recent advancements in the field of artificial intelligence (AI) sparked a flurry of interest from consumers and investors alike. The dawn of generative AI early last year has also had an impact on companies at the cutting edge of the technology, sending sales and profits to new heights. This, in turn, has sent the stock prices of these companies surging as investors scramble to get in on the ground floor of the paradigm shift in the technology landscape. Nowhere is this more evident than Super Micro Computer (NASDAQ: SMCI), also called Supermicro, which supplies servers with the computational horsepower needed for AI.

The company’s robust operating performance and consistent execution have driven its stock into the stratosphere. Since the start of 2023, Supermicro shares have gained a staggering 650%, making it one of the market’s top performers. Fueling its rise has been triple-digit gains in both revenue and profits, thanks to the insatiable demand for the hardware needed to process AI. Furthermore, since its IPO in mid-2007, the stock has soared from an $8 offering price to nearly $617 per share as of Tuesday’s market close, representing gains of 7,612%.

On Tuesday, in conjunction with its quarterly financial results, Supermicro announced plans to split its stock for the first time ever. This announcement is sparking renewed interest in this AI player. Let’s review the details of the upcoming stock split and what it means for investors.

Image source: Getty Images.

The fine print

Supermicro announced in a regulatory filing that its board of directors had approved a 10-for-1 forward stock split. This will be “effected through an amendment to the company’s Amended and Restated Certificate of Incorporation,” which “will effect in a proportionate increase of the number of shares of authorized common stock.”

As a result of this split, shareholders will receive nine additional shares of stock for each share they own after the market closes on Monday, Sept. 30. The stock is expected to begin trading on a split-adjusted basis on Tuesday, Oct. 1.

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