Boom! I was willing to ride out the delayed 10K but not this. Once again I caught a falling knife. Besides the accounting accusation (premature shipment for recognition of revenue) there is now an allegation that shipments were being made to China on export restricted chips. The recent SMCI statement that the annual 10K report will not affect the overall numbers maybe makes sense. Perhaps there was some end of quarter to quarter revenue massaging that has no cumulative effect on the annual report. Given the physically adjoining five fabrication familial businesses, this seems all too easy a game to play a long way from SEC oversight. But at the end of the day, either the net income is there or not there. Perhaps we saw this slippage with the declining margins rather than due all to the capex investments? The signs were there.
So how does the US restrict chips and reseller shipments from Taiwan to China? I have so many questions that I am just not qualified to answer. You have to wonder why a leader, CEO Charles Liang, would jeopardize his company when business is booming and the stock flying so high.
While at Juniper Networks for 7 years, we worked with and bought SMCI appliances for many years; great products, great service, and good people to work with in Silicon Valley. So sad. How will this DOJ investigation affect sales and margins going forward in what should be a spectacular 2025? My head hurts from the whipsaw of information. Yes, a DOJ investigation will take many months to resolve, creating a overhanging dark clouds. I’m out. Sorry for my venting and this useless contribution to this board.
-zane