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Sellers in SMCI

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SMCI cannot bounce, every time it gaps up, sellers push it down. It is not acting like it did on the way up.

交易结束：到达止损

Stop out at $816

交易手动结束

Shorted the gap up on Friday at 887 and covered today at 786.
This is too much excitement for the summer . I am done with SMCI for a while...

注释

The stock was relatively weak for over 2 months and now they missed both on EPS and Revenue. What a surprise...not!

注释

covered my last lot at $488.51 and
then found out that SMCI is accused of accounting irregularities from short-seller Hindenburg Research. It claims that the company engaged in accounting manipulations.
Yes, I know- the effin short sellers. Yet, SMCI was delisted from NASDAQ back in August 23, 2018 and if this is true, it maybe "game over" for the stock.

Note to self-today is August 30, 2024 and info about Hindenbur's research went public on August 27

注释

I followed this all the way down, shorting at 45, then got squeezed at 50 before re-shorting at 47.50. The last short has been easier to hold, and I considered adding more before yesterday’s close but held off. And as of this morning, this is the third successful short on the way down with SMCI trading 30% down at $33 .
It’s no secret—when a company is caught twice cooking the books, confidence is gone. I’m sure there are long-term, buy-and-hold investors clinging on, hoping this next accounting scandal at SMCI is just a bear raid. But with having Ernst & Young resign, I’m getting a strong feeling we might be looking at another ‘WorldCom’ situation. Let’s wait and see…

注释

⚠️ WARNING: SMCI Delisting Risk ⚠️
Super Micro Computer, Inc. (SMCI) is currently facing potential delisting from Nasdaq due to ongoing compliance issues. Here’s what investors need to know:
🚨 Compliance Deadline: SMCI has until November 16, 2024 to file its overdue annual report or submit a compliance plan to Nasdaq. Missing this deadline could trigger formal delisting procedures.

What Happens if Delisted?
Delisting Process Timeline: Missing the deadline does not mean immediate delisting. Nasdaq typically allows for appeals and compliance reviews, which could extend the timeline.
Trading on OTC Markets: If delisted, SMCI could move to over-the-counter (OTC) markets, which typically have lower liquidity and wider spreads—potentially impacting both long and short positions.

Impact on Short Positions:
Options to cover: Post-delisting, shorts may still be covered on the OTC, though price volatility and transaction costs could rise.
Broker Intervention: If trading halts completely, brokers may close short positions at a final market price, which could theoretically reach zero.
🚩 Key Takeaway: The compliance deadline is fast approaching. Updates on SMCI’s status will have a direct impact on its Nasdaq future. Long or short-- consult your broker, and prepare for potential trading changes!
The actual delisting date could follow after November 16, 2024, depending on Nasdaq's process and any appeals or compliance efforts by SMCI.

And remember: "If you cook the books, you’re toast!"

注释

SMCI dropped right from our second short point in the $48 area and didn’t stop for 30 points! The trade hit its “pause” when SMCI announced BDO as their new auditor. Now, I get it—BDO has over 90% non-compliance in last year’s audits, but at the end of the day, SMCI does have an auditor.

This weekend every “news” outlet is pumping the stock’s nearly 100% bounce. If you ask me, this feels like a typical bear trap in action. Monday could be another “ouch” day for the shorts.

As for me? I needed the weekend to think it over. Do I hold my full size for the potential zero or take some profits here and ride the smaller position? Decisions, decisions...

What do you think? Stick it out or take some off the table?

注释

I nominate SMCI for "The Dirtiest Company of 2024."
Honestly, is there a pump-and-dump news outlet left that hasn’t hyped how "deep value" SMCI is? Let’s be real—it’s stocks like this that create the best opportunities. Sure, they take more work than I usually like to put in, but once a year, it’s fun to play a match like this.
Right now, I’m holding my core short position and trading around the volatility. But it’s getting trickier—the lower my average short price drops (from $48 to $43 now), the more precise I need to be. My guess? There’s a big resistance cluster just above the Dec 2 highs, and if it clears that, we could see $53, maybe even $63.

But let’s face it—I think this stock is heading to ZERO.
Why?
We still don’t have audited financials from last year. Losing Deloitte & Touche as an auditor is one thing, but following that with losing Ernst & Young the next year is an even bigger red flag. Now, they’re working with a chop shop audit firm that inspires zero confidence. $5 billion in quarterly sales? Until those audited financials come out, it’s just a number on the wall. I’ll continue trading around my short position as long as it works.

End of Last Week:

Nov 25:
I didn’t cover—in fact, I added to my short right into the gap just before the open @38. The trick here is always patience: wait to see what level buyers are defending before the open (37.81 in this case). Once those bids disappear, then you short, knowing that the prior support should now act as resistance. The big mistake is shorting before the open, thinking the price is gapping "up too much." The market has to open, and sellers need to show up first. Otherwise, shorting before the open is relying on what isn’t there—and that’s called gambling.

Nov 26:
I had a strange feeling and decided to cover half my position @35.91. Spent the entire weekend questioning myself: Why did I do that? And worse—What will I do if this thing opens below $5 a share?!

Dec 2:
Oops, the stock isn’t at $5—it’s up $10!
Looks like intuition sometimes pays off. Honestly, I couldn’t explain *why* I covered 35.91s last week other than the feeling to get out was too strong to ignore

Closing Thoughts:
Until this company puts its audited financials on the table, every move up is just smoke and mirrors. Let's wait and see how this one plays out at the end.

P.S. ENRON ENRON ENRON!

注释

I realized how biased I’ve become, switching from a trader mentality to an accountant mentality ever since Ernst & Young resigned as SMCI’s auditor. Technically, this trade was done when they found the new auditor, and we had two days to cover everything around $20.

But here’s the thing—I’m not just an accountant; I’m also a human being with the same challenges as everyone else. My disciplined side is yelling, “Cover that sh*t, man, it was a great trade!” while my inner nerd is whispering, “But Deloitte resigned, then E&Y, and we still don’t have the numbers…”

So, this is my challenge: balancing those voices. If it heads back down, I’ll probably take a little off, but let’s be honest—the majority of my position is staying. Why? Because I need to keep my auditor nerd under control.