SAN JOSE, Calif. – Super Micro Computer, Inc. (NASDAQ: SMCI), a titan in the AI, cloud, storage, and 5G/Edge IT solutions arena, today announced a significant financial move: the pricing of $2.0 billion in convertible senior notes due in 2030. The offering targets qualified institutional buyers under Rule 144A of the Securities Act of 1933, as amended. Furthermore, the initial purchasers have an option to purchase an additional $300.0 million of the Convertible Notes within the next 13 days, potentially boosting the funding even further.
These notes, representing a senior, unsecured debt obligation, will not accrue regular interest. Instead, interest will only be triggered under specific conditions detailed in the indenture governing the notes.
The crucial details for investors? The initial conversion rate stands at 18.1154 shares of Supermicro’s common stock per $1,000 principal amount of the notes, translating to an initial conversion price of roughly $55.20 per share. This reflects a premium of about 35.0% over the closing price of $40.89 per share on June 23, 2025. Keep in mind, both the conversion rate and price are subject to adjustments based on future events.
The notes offer flexibility. Supermicro can redeem them for cash on or after June 15, 2028, but before the 20th trading day before maturity, contingent upon meeting certain conditions, including being “freely tradable” and, the stock price exceeding 130% of the conversion price. The redemption price will equal the principal plus any accrued interest.
Further sweetening the deal, noteholders can force Supermicro to repurchase the notes upon a fundamental change (as defined in the indenture), at a cash repurchase price of 100% of the principal, plus any accrued interest. The notes are slated to mature on June 15, 2030, unless they’re redeemed, repurchased, or converted sooner. Before December 17, 2029, conversion is subject to specific conditions; afterward, holders can convert anytime before maturity. Supermicro can opt to settle conversions with cash, shares, or a combination of both. The offering is expected to close on June 26, 2025, contingent on customary closing conditions.
What will Supermicro do with the significant influx of capital? The company anticipates net proceeds of approximately $1.96 billion, potentially rising to $2.26 billion if the initial purchasers fully exercise their option. A portion, roughly $158.4 million, will be dedicated to funding capped call transactions described below. Supermicro will also allocate around $200.0 million to repurchase its own shares concurrently with the offering. The remaining proceeds are earmarked for general corporate purposes, including bolstering working capital for expansion.
In a move that often accompanies such offerings, Supermicro has entered into privately negotiated capped call transactions with initial purchasers, or their affiliates, and other financial institutions. These transactions aim to mitigate potential dilution to shareholders upon conversion of the notes and/or offset any cash payments exceeding the principal. While the specifics are complex, the cap price of these transactions is initially $81.78 per share, which is a sizable premium (100%) above the closing price on June 23, 2025, subject to customary adjustments.
Expect activity in the market. The option counterparties are likely to hedge their positions by engaging in derivative transactions involving Supermicro’s stock and potentially purchasing shares around the offering. These moves, and adjustments thereafter, could impact the stock and note prices, affecting the conversion of the notes.
In a related maneuver, Supermicro will repurchase approximately 4.9 million shares concurrently with the offering, using one of the initial purchasers’ affiliates. These repurchases, and any future ones, can influence the stock’s trading price and the initial terms of the Convertible Notes.
This press release isn’t soliciting any offers; it’s merely an announcement of the offering.
**About Super Micro Computer, Inc.**
Supermicro (NASDAQ: SMCI) is a global force in Application-Optimized Total IT Solutions. Based in San Jose, California, the company is known for its forward-thinking approach to enterprise, cloud, AI, and 5G Telco/Edge IT Infrastructure. Supermicro is a fully integrated IT solutions provider, offering everything from servers to AI, storage, and networking gear, plus supporting software and services. The company’s expertise extends to motherboard and chassis design, enabling cutting-edge innovation. Its production facilities are located in the US, Taiwan, and the Netherlands, supporting global operations. These offerings are optimized to improve efficiency and decrease environmental impact.
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