Supermicro CFO (SMCI) Sells 43% of Stock Holdings

This should not be construed as investment advice. The author holds no positions in any stocks mentioned herein.

Supermicro’s Recent Insider Transactions and Business Developments

Supermicro (SMCI) is currently facing a wave of insider selling, particularly from its chief financial officer, David Weigand, who has recently divested a considerable portion of his stakes in the company. This trend raises eyebrows among investors, as high levels of insider selling may suggest that executives believe the company’s share price is overstated.

CFO’s Stock Liquidation

David Weigand has sold a total of 67, 000 shares, which accounts for approximately 43% of his previous holdings, at an average price of $44.02 per share. Following this transaction, Weigand retains ownership of 88, 599 shares.

Strategic Partnership with DataVolt

In a positive business development, Supermicro has finalized a “multi-year partnership agreement”with DataVolt, a prominent data center operator in Saudi Arabia. While the full terms of the deal remain undisclosed, its estimated value is as high as $20 billion. This agreement will see Supermicro provide high-density GPU platforms and advanced liquid cooling systems to DataVolt over subsequent years.

According to analysts at Goldman Sachs, this partnership could yield approximately $5 billion in annual revenue for Supermicro, along with an estimated EBIT of around $200 million, based on a five-year contract duration and an anticipated profit margin of 5%.

Innovations in Liquid Cooling Technology

Moreover, Supermicro has unveiled its next-generation liquid cooling solutions, the DLC-2, designed to optimize energy and water consumption in data centers by up to 40%.This innovative technology also aims to lower the Total Cost of Ownership (TCO) by as much as 20%.

Supermicro’s approach involves enhanced cold plate coverage over server components, which allows for a reduction in the number of fans and enables them to operate at lower speeds. Remarkably, the DLC-2 technology can capture 98% of the heat generated by server racks, accommodating inlet liquid temperatures as high as 45 degrees Celsius.

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