Super Micro Stock Plunges 33% on $2.5 B Smuggling Charges; Price Target Cut to $22
Super Micro’s stock fell 33% to $20.53 after a co-founder and others were charged with smuggling $2.5 billion of AI technology to China, triggering a collapse in $31 and $33 call options. Northland downgraded the stock to Market Perform with a $22 target, forecasting flat revenue and earnings.
1. Plummeting Shares After Smuggling Allegations
On March 23, Super Micro’s shares plunged 33% to $20.53 following charges that a co-founder and other individuals smuggled roughly $2.5 billion in AI technology to China. This marked the largest single-day drop for the stock this year.
2. Options Market Reaction
Call options with $31 and $33 strike prices suffered heavy losses as open interest collapsed, wiping out bullish positions. Meanwhile, put option volumes surged above existing open interest, indicating a wave of new bearish bets after the news broke.
3. Analyst Downgrade and Outlook
Northland cut its rating on Super Micro to Market Perform from Outperform and lowered its price target to $22. The firm described the separation of the Chief Compliance Officer and CFO roles as reactionary and expects revenue and earnings to remain flat until the CEO and chairman roles are split.