Super Micro Computer, Inc. (NASDAQ: SMCI) has announced the pricing of $2.0 billion aggregate principal amount of convertible senior notes due 2030. The convertible notes will not bear regular interest, and the principal amount of the convertible notes will not accrete. The initial conversion rate of the notes is set at 18.1154 shares of the company's common stock per $1,000 principal amount of convertible notes, equivalent to an initial conversion price of approximately $55.20 per share, representing an initial conversion premium of about 35.0% above the closing price of $40.89 per share on June 23, 2025.
The company will receive net proceeds from the offering of approximately $1.96 billion, or approximately $2.26 billion if the initial purchasers exercise their option to purchase additional convertible notes in full. Super Micro Computer, Inc. expects to use $158.4 million of the net proceeds to fund the cost of entering into capped call transactions. Additionally, the company anticipates using approximately $200.0 million of the net proceeds to repurchase shares of its common stock concurrently with the offering.
In connection with the pricing of the convertible notes, the company entered into privately negotiated capped call transactions with certain initial purchasers or their affiliates and other financial institutions. The capped call transactions are expected to cover the number of shares of the company’s common stock underlying the convertible notes, with the cap price initially set at $81.78 per share.
Moreover, the company expects to repurchase approximately 4.9 million shares of its common stock concurrently with the offering from purchasers of the convertible notes in privately negotiated transactions. These concurrent share repurchases, and any other repurchases of shares of the company’s common stock, may impact the trading price of the company’s common stock.
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.
The press release emphasizes that this 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. It also states that the offer and sale of the convertible notes and the shares of the company’s common stock issuable upon conversion of the convertible notes have not been registered under the securities act or the securities laws of any other jurisdiction. Today the company's shares have moved -3.75% to a price of $47.4201. For more information, read the company's full 8-K submission here.
