Why is Super Micro Computer’s stock price so ‘low’ today? Don’t worry. SMCI recently broke up

As of the end of August, Super Micro Computer, Inc. had a hard time.

The company, also known as Supermicro, is one of America’s largest manufacturers of high-end servers—the kind needed to power AI operations. The stock market was rocked recently when activist short-selling investment firm Hindenburg Research issued a report that alleged “accounting red flags” at the company. After the Hindenburg report was made public, Super Micro Computer (NASDAQ: SMCI ) stock fell 20% to $443 per share.

Last week, news of a possible Department of Justice (DOJ) investigation into the company, possibly for these “obvious accounting red flags,” sent the stock down 12% to below $400 per share. (Supermicro did not respond to our request for comment about the rumored investigation, which was reported by Bloomberg.)

But today, SMCI’s share price is very low, the shares are now trading around $42 as of the time of this writing. But if you’re an SMCI investor—don’t panic. The stock has not yet broken. It’s just different. Here’s what you need to know:

SMCI 10-for-1 stock split

As of yesterday’s market close, SMCI’s stock price was $416.40 per share. But when markets opened this morning, its stock price was trading at around $42 per share. The big “drop” is because, after the closing bell yesterday, SMCI shares split 10-for-1.

That means that for every SMCI share that was there yesterday, nine more shares are there today. But because there are now a total of 10 shares of SMCI stock that were there yesterday, that means each share is worth one-tenth of yesterday’s price—which is why SMCI’s stock price is so “low” today.

So does a Super Micro Computer cost more or less today than it did yesterday?

Not counting any gains or losses on SMCI stock during today’s regular trading session, Super Micro Computer is just as valuable today as it was yesterday.

Creating more shares in a company does not inherently make it more valuable, because the greater availability of shares makes each one less valuable.

Yesterday, Super Micro Computer’s market cap (the total value of all its shares) was worth about $243 billion—and today its market cap is about the same as at the time of this writing.

What those stocks do in the future remains to be seen. But SMCI stock could be in trouble if the DOJ really comes out to make sure it investigates Super Micro Computer.

So stock splits are normal, right?

That’s right. A few recent examples include Nvidia, Walmart, Broadcom, and Chipotle. Companies often split their stock because a lower price seems more attractive to salespeople and employees.