All things STOCKS

[Thunder Good-Oil]

Interesting one that I wasn't really tracking before. If I hadn't started a large position in RIVN today I would probably take a bite. Will keep an eye on it.

Dell and Hewlett-Packard are Super Micro’s primary competition.

If SMCI can withstand the DOJ’s investigation, the current and forward P/Es suggest lots of upside considering their AI, crypto mining, and cloud demand. There’s no telling where things go with accusations of accounting irregularities. It might be dead money while the situation sorts out.

 

[BigOrangeMojo]

Dell and Hewlett-Packard are Super Micro’s primary competition.

If SMCI can withstand the DOJ’s investigation, the current and forward P/Es suggest lots of upside considering their AI, crypto mining, and cloud demand. There’s no telling where things go with accusations of accounting irregularities. It might be dead money while the situation sorts out.

They couldnt get 10K filed within 60 days (and now 90) after their year end. Must be huge issue with internal controls or financials since auditors clearly not signing off...

This is above and beyond DOJ issues...

 

[Thunder Good-Oil]

They couldnt get 10K filed within 60 days (and now 90) after their year end. Must be huge issue with internal controls or financials since auditors clearly not signing off...

This is above and beyond DOJ issues...

Lots of companies have ****** accounting practices. Also, missing filing deadlines could be a symptom rather than an underlying issue. If there has been something criminal going on, the internal and external accountants would have to be idiots to ignore it and file/sign off on fraudulent documents.

Shortly after their last high profile accounting irregularities they were added to the S&P 500 and the NASDAQ 100. Also the shares skyrocketed. If they avoid convictions the other stuff will work itself out. It’s not that difficult to get rid of the bad players once they’re exposed.

It wouldn’t surprise me if senior management is skewed toward sales (and engineering). The sales executives are usually put in charge when companies are doing great while finance often gets put in charge after the company has been f’d up.

 

[Thunder Good-Oil]

SMCI isn’t in an incredible and unique industry. They probably just need better managers. Buffett ran the insurance side efficiently and effectively. B-H didn’t invent insurance. Chipotle is another example. Their business isn’t complicated. They just execute at a high level. SMCI has a backlog of orders and generates revenue as quickly as they can push their products off the loading docks and onto trucks. And they only two formidable competitors.

 

[BigOrangeMojo]

Lots of companies have ****** accounting practices. Also, missing filing deadlines could be a symptom rather than an underlying issue. If there has been something criminal going on, the internal and external accountants would have to be idiots to ignore it and file/sign off on fraudulent documents.

Shortly after their last high profile accounting irregularities they were added to the S&P 500 and the NASDAQ 100. Also the shares skyrocketed. If they avoid convictions the other stuff will work itself out. It’s not that difficult to get rid of the bad players once they’re exposed.

It wouldn’t surprise me if senior management is skewed toward sales (and engineering). The sales executives are usually put in charge when companies are doing great while finance often gets put in charge after the company has been f’d up.

There are few, if any, companies the size of SCMI have the issues and repeated issues SCMI has. Filing 10Ks late is a big red flag.

Missing deadlines is absolutely a symptom of a bigger program. The question is how wrong their interim financial stmts have been......

Are you really buying a company with a 20 PE ratio or one with a 35 PE or 50 PE?

 

[Firebirdparts]

If you're going to fake earnings you have to start earlier than they evidently did.

 

[BigOrangeMojo]

If you're going to fake earnings you have to start earlier than they evidently did.

A red flag is operating income per income statement for 2024 thru Q3 (922M of income) far deviates from cash flows from operating activities (1.85 billion loss)....

Its not a bad valuation if their financials are accurate as TGO pointed out. I just have major concerns on accuracy.

 

[Thunder Good-Oil]

There are few, if any, companies the size of SCMI have the issues and repeated issues SCMI has. Filing 10Ks late is a big red flag.

Missing deadlines is absolutely a symptom of a bigger program. The question is how wrong their interim financial stmts have been......

Are you really buying a company with a 20 PE ratio or one with a 35 PE or 50 PE?

3 weeks ago the CEO announced that they don’t expect to have material restatements of their financials.

It’s been suggested that the DOJ investigation is due to the short selling firm’s accusations. Not properly reporting related party transactions wouldn’t necessitate restating previously published financials. Operating in the gray area with exports might only result in an immaterial fine. But the short seller can throw those things out there and make it sound worse than it is and then cover their short position after share prices react. The info is also leaking out to the media from somewhere other than the DOJ.

Stock already fell by 2/3rds and they’re still cranking out products. A 50x p/e would be cheap if shares get back even half of the decline. But if they don’t have to restate as the CEO previously suggested, shares might be a really good value right now. Almost 40% of firms are still rating SCMI as a buy.

If I get involved I’ll probably hold off until after the upcoming 10 for 1 split settles down. I also kind of want to see if Kamala wins and the D’s get more seats in Congress. But the latter applies to everything. I might go heavy into crypto if that scenario plays out.

 

[BigOrangeMojo]

3 weeks ago the CEO announced that they don’t expect to have material restatements of their financials.

It’s been suggested that the DOJ investigation is due to the short selling firm’s accusations. Not properly reporting related party transactions wouldn’t necessitate restating previously published financials. Operating in the gray area with exports might only result in an immaterial fine. But the short seller can throw those things out there and make it sound worse than it is and then cover their short position after share prices react. The info is also leaking out to the media from somewhere other than the DOJ.

Stock already fell by 2/3rds and they’re still cranking out products. A 50x p/e would be cheap if shares get back even half of the decline. But if they don’t have to restate as the CEO previously suggested, shares might be a really good value right now. Almost 40% of firms are still rating SCMI as a buy.

If I get involved I’ll probably hold off until after the upcoming 10 for 1 split settles down. I also kind of want to see if Kamala wins and the D’s get more seats in Congress. But the latter applies to everything. I might go heavy into crypto if that scenario plays out.

If the issues aren't material, I agree with you. It's a good valuation to buy.

The disparity between cash flow from operations and income from operations just gives me Worldcom flashbacks. Not implying anything, it's just another reason why I'm hesitant to catch this falling knife..

(Best career move was not taking job with AA audit after graduation in Jackson, MS office since they signed off on Worldcom)

 

[Thunder Good-Oil]

If the issues aren't material, I agree with you. It's a good valuation to buy.

The disparity between cash flow from operations and income from operations just gives me Worldcom flashbacks. Not implying anything, it's just another reason why I'm hesitant to catch this falling knife..

(Best career move was not taking job with AA audit after graduation in Jackson, MS office since they signed off on Worldcom)

Yeah, I wouldn’t make much of a WorldCom analogy either. Or Enron or the dot coms or even Tyco. Their business seems sound. It might just be that senior management are tech guys that are clueless about how to run a company that’s no longer a small cap with only a couple billion of sales.

 

[BigOrangeMojo]

Yeah, I wouldn’t make much of a WorldCom analogy either. Or Enron or the dot coms or even Tyco. Their business seems sound. It might just be that senior management are tech guys that are clueless about how to run a company that’s no longer a small cap with only a couple billion of sales.

I agree, this is a profitable company from both cash flow/accounting perspective. I do think how profitable is a fair question to ask.

The disparity between accounting/cash flow was the real smoking gun behind Worldcom (For yrs Worldcom reported positive accounting income from operations but showed consistent losses in cash flow from ops) That was the point that I'm making. I wasnt saying they were broke like Worldcom, I was just stating that was evidence there could be some creative accounting here.

 

[Velo Vol]

 

[Thunder Good-Oil]

Long term China is a mess. They have as much of a national debt problem as we do. Their government is pretty much one guy. Their demographics are imploding. I don’t think that the trend of companies in the free world finding better options for supply chains will end. And they’re being a PIA with their endless military threats.

Short term it looks like the bullish trade has had an unsustainable run. They still cheat, steal, and can’t be trusted.

 

[Thunder Good-Oil]

The futures are pretty flat. I was expecting a pop after a longshoreman strike has been avoided. For now.

 

[Thunder Good-Oil]

And now SAVE will soon be declaring bankruptcy. Thank you Joe and Kamala for protecting the consumers.

Justice Department Statements on JetBlue Terminating Acquisition of Spirit Airlines

JetBlue Airways Corporation (JetBlue) announced today that it has abandoned its $3.8 billion acquisition of Spirit Airlines Inc. (Spirit). In January, the U.S. District Court for the District of Massachusetts blocked the transaction because it violated “the core principle of antitrust law: to...

www.justice.gov

 

[Go aeiou]

And now SAVE will soon be declaring bankruptcy. Thank you Joe and Kamala for protecting the consumers.

Justice Department Statements on JetBlue Terminating Acquisition of Spirit Airlines

JetBlue Airways Corporation (JetBlue) announced today that it has abandoned its $3.8 billion acquisition of Spirit Airlines Inc. (Spirit). In January, the U.S. District Court for the District of Massachusetts blocked the transaction because it violated “the core principle of antitrust law: to...

www.justice.gov

Not sure if there is anything worse than Spirit? One time was too many for me.
Jet Blue finally shows a profit so now they want to buy a trash airline.
It'll be intersting to see if anyone else wants Spirit as a going concern.

 

[Carp]

Could be nothing, but those who pay attention to more of the technical side of trading, NVDA's chart over the last 2-3 months looks nearly identical to the chart before it's last run up (early March to Mid May). Could be ready to break out of this consolidation stage we've been in since July. Would be nice to see $150 before the end of the year.