Super Micro Computer (SMCI -5.15%) had its initial public offering (IPO) in March 2007 at a price of $8 per share. The stock frequently saw volatile swings, but it started of 2020 priced at roughly $24 per share -- tripling its IPO price. While the performance came in just slightly ahead of the S&P 500's total return of 197.5% across that stretch, the stock's performance in this decade's trading has been nothing short of incredible.
Super Micro Computer's incredible performance this year led to a stock split
Spurred by rising demand for high-performance rack servers capable of training and running artificial intelligence (AI) systems, Supermicro's sales, earnings, and stock price have seen incredible growth. The stock climbed to as high as $1,229 per share earlier this year, and the company's management subsequently announced that it would move forward with a 10-for-1 stock split. While the company's share price has fallen substantially over the last few months, the split took effect on Oct. 1.
The recently completed 10-for-1 stock split is the only split in the company's history. In other words, you would now have 10 shares if you bought one share of the company's stock on the day of its IPO and held onto its position. If you bought one share at the company's IPO price, you would now have 10 shares worth a combined total of roughly $416 as of this writing -- good for a 5,100% profit.
On the other hand, Supermicro stock has actually fallen roughly 33% since the stock split was first announced in August. Stock splits have corresponded with rising share prices for some other companies, but the server-technologies specialist has been hit with multiple valuation headwinds recently. Catalysts for sell-offs have included disappointing gross margins, a bearish write-up short-seller from Hindenburg Research, a delayed 10-K filing, and a report that the company could be investigated by the DoJ.
Supermicro's recent stock split hasn't changed any fundamental aspect of the business, but it's possible the split could make the stock more attractive to some investors.
