Server firm Super Micro Computer announced plans for a 10-for-1 stock split after its shares more than doubled in value in 2024 on the back of an artificial intelligence frenzy. The announcement came as part of the company’s quarterly earnings report shared on Tuesday.
The stock split, which will be effective on October 1 after being approved by the company’s board of directors, will see the shareholders receive 10 outstanding shares for every share they own. The split is aimed to make the company’s shares more attractive and accessible to individual investors.
Super Micro Computer’s stock closed at $616.94 per share on Tuesday, marking a 116.13% increase year-to-date. What followed was a rollercoaster in the aftermarket trading that saw the stock jump by more than 17% before crashing by 12% on its closing price.
The slide was a result of underwhelming fiscal fourth-quarter earnings. The company beat the analysts’ estimates with $5.31 billion versus $5.30 billion expected but disappointed in other segments. It recorded adjusted earnings per share of $6.25 compared to estimates of $8.07, while the company’s gross margin came at 11.2%, down from the third quarter’s 15.5%.
The earnings misses are likely associated with the cost of the company’s transition to new AI chips, which is denting the company’s profit but is expected to pay off significantly in the future.