Super Micro Computer, Inc. (NASDAQ: SMCI) (“Supermicro” or the
“Company”), a Total IT Solution Manufacturer for AI, Cloud,
Storage, and 5G/Edge, today announced that it intends to offer,
subject to market conditions and other factors, $1.5 billion
aggregate principal amount of convertible senior notes due 2029
(the “Convertible Notes”). The Convertible Notes are to be offered
and sold to “qualified institutional buyers” pursuant to Rule 144A
under the Securities Act of 1933, as amended (the “Securities
Act”). The Company also expects to grant a 13-day option to the
initial purchasers to purchase up to an additional $225.0 million
aggregate principal amount of the Convertible Notes.
The Convertible Notes will be senior, unsecured obligations of
the Company and will accrue interest payable semi-annually in
arrears. The Convertible Notes will mature on March 1, 2029, unless
earlier redeemed, repurchased or converted in accordance with their
terms prior to such date. Prior to the close of business on the
business day immediately preceding September 1, 2028, the
Convertible Notes will be convertible only upon the satisfaction of
certain conditions and during certain periods, and on and after
September 1, 2028, at any time prior to the close of business on
the second scheduled trading day immediately preceding the maturity
date, the Convertible Notes will be convertible regardless of these
conditions. The Company will settle conversions by paying or
delivering, as applicable, cash, shares of the Company’s common
stock or a combination of cash and shares of the Company’s common
stock at the Company’s election. The initial conversion rate,
interest rate and other terms of the Convertible Notes will be
determined at the time of pricing in negotiations with the initial
purchasers of the Convertible Notes.
In connection with the pricing of the Convertible Notes, the
Company expects to enter into privately negotiated capped call
transactions with one or more financial institutions which may
include one or more of the initial purchasers or their affiliates
(the “option counterparties”). If the initial purchasers exercise
their option to purchase additional Convertible Notes, the Company
expects to enter into additional capped call transactions with the
option counterparties. The capped call transactions are expected
generally to reduce the potential dilution to the Company’s common
stock upon conversion of the Convertible Notes and/or offset any
potential cash payments the Company is required to make in excess
of the principal amount of the Convertible Notes, as the case may
be, with such reduction and/or offset subject to a cap.
In connection with establishing their initial hedges of the
capped call transactions, the option counterparties or their
respective affiliates expect to enter into various derivative
transactions with respect to the Company’s common stock and/or
purchase shares of the Company’s common stock concurrently with or
shortly after the pricing of the Convertible Notes. This activity
could increase (or reduce the size of any decrease in) the market
price of the Company’s common stock or the Convertible Notes at
that time. In addition, the option counterparties or their
respective affiliates may modify their hedge positions by entering
into or unwinding various derivatives with respect to the Company’s
common stock and/or purchasing or selling the Company’s common
stock or other securities of the Company in secondary market
transactions following the pricing of the Convertible Notes and
prior to the maturity of the Convertible Notes (and are likely to
do so during any observation period related to a conversion of the
Convertible Notes or following any repurchase of the Convertible
Notes by the Company to the extent the Company elects to unwind a
corresponding portion of the capped call transactions in connection
with such repurchase). This activity could also cause or avoid an
increase or a decrease in the market price of the Company’s common
stock or the Convertible Notes, which could affect noteholders’
ability to convert the Convertible Notes, and, to the extent the
activity occurs during any observation period related to a
conversion of the Convertible Notes, it could affect the amount and
value of the consideration that noteholders will receive upon
conversion of the Convertible Notes.
The Company expects to use a portion of net proceeds of the
offering to fund the cost of entering into the capped call
transactions. The Company intends to use the remainder of the net
proceeds from the offering for general corporate purposes,
including to fund working capital for growth and business
expansion. If the initial purchasers exercise their option to
purchase additional Convertible Notes, the Company intends to use a
portion of the net proceeds from the sale of additional Convertible
Notes to fund the cost of entering into additional capped call
transactions.
This press release is neither an offer to sell nor a
solicitation of an offer to buy the Convertible Notes or the shares
of the Company’s common stock issuable upon conversion of the
Convertible Notes, if any, nor shall there be any sale of these
securities in any state or jurisdiction in which such an offer,
solicitation or sale would be unlawful prior to the registration or
qualification under the securities laws of any such state or
jurisdiction. Any offer of these securities will be made only by
means of a private offering memorandum.
The offer and sale of the Convertible Notes and the shares of
the Company’s common stock issuable upon conversion of the
Convertible Notes, if any, have not been registered under the
Securities Act, or the securities laws of any other jurisdiction,
and may not be offered or sold in the United States absent
registration or an applicable exemption from registration
requirements.
Forward-looking Statements:
This press release contains “forward-looking statements” within
the meaning of the Private Securities Litigation Reform Act of 1995
regarding the planned offering. Words such as “anticipates,”
“estimates,” “expects,” “projects,” “forecasts,” “intends,”
“plans,” “will,” “believes” and words and terms of similar
substance used in connection with any discussion identify
forward-looking statements. These forward-looking statements are
based on management’s current expectations and beliefs about future
events and are inherently susceptible to uncertainty and changes in
circumstances. Except as required by law, the Company is under no
obligation to, and expressly disclaims any obligation to, update or
alter any forward-looking statements whether as a result of such
changes, new information, subsequent events or otherwise. With
respect to the planned offering and the capped call transactions,
such uncertainties and circumstances include whether the Company
will offer the Convertible Notes or consummate the offering, enter
into the capped call transactions, the anticipated terms of the
Convertible Notes and the capped call confirmations and the use of
the net proceeds from the offering. Various factors could also
adversely affect the Company’s operations, business or financial
results in the future and cause the Company’s actual results to
differ materially from those contained in the forward-looking
statements, including those factors discussed in detail in the
“Risk Factors” sections contained in the Company’s Annual Report on
Form 10-K for the year ended June 30, 2023 and the Company’s
Quarterly Reports on Form 10-Q for the quarters ended September 30,
2023 and December 31, 2023, which are filed with the Securities and
Exchange Commission.
About Super Micro Computer, Inc.
Supermicro (NASDAQ: SMCI) is a global leader in
Application-Optimized Total IT Solutions. Founded and operating in
San Jose, California, Supermicro is committed to delivering first
to market innovation for Enterprise, Cloud, AI, and 5G Telco/Edge
IT Infrastructure. We are a Total IT Solutions manufacturer with
server, AI, storage, IoT, switch systems, software, and support
services. Supermicro's motherboard, power, and chassis design
expertise further enables our development and production, enabling
next generation innovation from cloud to edge for our global
customers. Our products are designed and manufactured in-house (in
the US, Taiwan, and the Netherlands), leveraging global operations
for scale and efficiency and optimized to improve TCO and reduce
environmental impact (Green Computing). The award-winning portfolio
of Server Building Block Solutions® allows customers to optimize
for their exact workload and application by selecting from a broad
family of systems built from our flexible and reusable building
blocks that support a comprehensive set of form factors,
processors, memory, GPUs, storage, networking, power, and cooling
solutions (air-conditioned, free air cooling or liquid
cooling).
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version on businesswire.com: https://www.businesswire.com/news/home/20240221926861/en/
Investor Relations Contact: Nicole Noutsios
email: ir@supermicro.com
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