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At this point, it seems like Apple and Amazon have hard facts and Bloomberg has more tales of "he said"/"she said" and didn't cross check. The journalists halve

by mtw 8y ago

At this point, it seems like Apple and Amazon have hard facts and Bloomberg has more tales of "he said"/"she said" and didn't cross check. The journalists halved Supermicro stock value, they have a responsibility to prove this actually happened.

myWindoonn 8y ago
Half of a worthless stock isn't much of a big deal. Supermicro isn't filing basic essential paperwork with the SEC, which is simultaneously extremely fishy and also a basic prerequisite for being a publically-traded company, and this problem predates Bloomberg's article by months. I'm not a CFP, but you should probably sell your Supermicro holdings now; they aren't gonna recover. https://www.businesswire.com/news/home/20180821005681/en/ https://www.businesswire.com/news/home/20180821005681/en/
- throwawaymath 8y ago
  That's not the point. Basic principles of integrity and accountability mandate that journalists be responsible for carefully weighing the consequences of their stories. They shouldn't just charge forward without significant due diligence and then put the onus on everyone else involved to prove the story isn't factual. That's specifically a component of their job when they're breaking the news. That a company's share price is already bruised or disreputable has no material impact here. It doesn't matter if a company has pre-existing and systemic financial problems; that doesn't mean we can be cavalier about publishing news that will wipe out half its value in a day. This kind of cavalier approach to company valuation isn't suitable for considering the consequences of erroneous stories. Moreover I think you'll find that regardless of how much you believe the stock is worthless, there is actually an objectively quantifiable loss that was suffered here. If you still believe the stock is worthless even after this reduction in share price then by all means short it. But you can't speak for the entire market, which clearly demonstrates that many parties disagree with you on Supermicro's valuation. Presumably some of those parties will be a little miffed if the Bloomberg story turns out to be largely incorrect - you can't just shrug and tell them, "Hey that stock is worthless, you shouldn't have owned any of it anyway."
  - busterarm 8y ago
    It was delisted from NASDAQ. It's a pink sheet/OTC stock. That is the highest level of "buyer beware" caution flag you can give. They're not a foreign company like Nintendo that doesn't want to go through regulatory hurdles. They haven't been able to bring their accounting up to standard for over a year. If you think there's a "fair market value" of a company that can't meet basic financial regulatory and accounting practices that is anywhere above the price of toilet paper, then I suggest you don't put any money in the stock market.
    - throwawaymath 8y ago
      None of that detracts my point. The company's pre-existing financial standing is not a suitable defense for loosening the standards of due diligence in journalism. If you're in a store and you break an item that was already scratched, you don't get a pass.
      - busterarm 8y ago
        https://www.bloomberg.com/news/articles/2018-10-09/new-evidence-of-hacked-supermicro-hardware-found-in-u-s-telecom https://www.bloomberg.com/news/articles/2018-10-09/new-evide...
      - busterarm 8y ago
        SMCI has 84% institutional ownership and only 20% held by insiders. Nobody really thinks it's worth anything but the large holders don't have to write down yet and probably are diversified across the industry. The market cap is like half a bil -- that's _tiny_ for a company as big as SuperMicro...even at the bil it was before the article. The stock is garbage.
        throwawaymath 8y ago
        Again, that doesn't really have anything to do with my core point.
coldcode 8y ago
https://appleinsider.com/articles/18/10/08/security-researcher-cited-in-bloombergs-china-spy-chip-investigation-casts-doubt-on-storys-veracity https://appleinsider.com/articles/18/10/08/security-research... One guy named as a source in the original article does not accept the story as written.
- _Codemonkeyism 8y ago
  One guy named as a source in the original article claims the backdoor sounds too complicated too him, not that he "doesn't accept the story as written".
  - close04 8y ago
    This hack is suggested to be an almost 1:1 copy of the a didactic PoC attack the source security researcher devised. The implication being that the article is based on his story rather than on any real fact. To this point Bloomberg has presented 0 evidence of any of this. You have to understand how the burden of proof works, you can't throw a rock in the pond and expect others to jump in and retrieve it. Bloomberg made the claim, Bloomberg has to support it. Until they do I will take everything they write/claim with a tablespoon of salt. From my perspective it may very well be an attempt to hit Supermicro and nothing more. The fact that Apple or Amazon are expected to show evidence that a yet unsubstantiated claim from Bloomberg is not real shows how low people set the bar for what reliable information means.
    - _Codemonkeyism 8y ago
      I love your commanding tone, reminds me of my time with the military. "You have to understand how the burden of proof works, [...]" I don't HAVE to do anything you say, thank god.
      - close04 8y ago
        And you’re doing a great job at that. I was giving you a hand when you obviously needed it, a thank tou would have sufficed. But in all honesty not understanding how something works makes your opinion on the topic about as valuble as a turd in the rain. Understanding how things work before attempting to pass judgement is “just” a matter of common sense and decency. But since no superior ordered them and you don’t have to have them, here we are.
_Codemonkeyism 8y ago
"At this point, it seems like Apple and Amazon have hard facts" Hard facts? Which ones? An independent review of all server hardware by an external auditor? Call me stupid but I don't think companies can audit themselves if a lot of money is at stake. Not saying Apple is wrong, but for now we still have "This isn't the case because we say so, believe us." nothing more. It will be interesting if Bloomberg has a followup or if they fold.
- craftyguy 8y ago
  To be fair, the accuser (bloomberg) still has "this is the case because we say so, believe us."
saudioger 8y ago
Uhh, Apple and Amazon are providing very few hard facts... and have a HUGE amount to lose if the story is true. I wouldn't take anything as certainty at this point, not even close.

by mtw 8y ago

myWindoonn 8y ago

Half of a worthless stock isn't much of a big deal. Supermicro isn't filing basic essential paperwork with the SEC, which is simultaneously extremely fishy and also a basic prerequisite for being a publically-traded company, and this problem predates Bloomberg's article by months. I'm not a CFP, but you should probably sell your Supermicro holdings now; they aren't gonna recover. https://www.businesswire.com/news/home/20180821005681/en/ https://www.businesswire.com/news/home/20180821005681/en/

throwawaymath 8y ago
That's not the point. Basic principles of integrity and accountability mandate that journalists be responsible for carefully weighing the consequences of their stories. They shouldn't just charge forward without significant due diligence and then put the onus on everyone else involved to prove the story isn't factual. That's specifically a component of their job when they're breaking the news. That a company's share price is already bruised or disreputable has no material impact here. It doesn't matter if a company has pre-existing and systemic financial problems; that doesn't mean we can be cavalier about publishing news that will wipe out half its value in a day. This kind of cavalier approach to company valuation isn't suitable for considering the consequences of erroneous stories. Moreover I think you'll find that regardless of how much you believe the stock is worthless, there is actually an objectively quantifiable loss that was suffered here. If you still believe the stock is worthless even after this reduction in share price then by all means short it. But you can't speak for the entire market, which clearly demonstrates that many parties disagree with you on Supermicro's valuation. Presumably some of those parties will be a little miffed if the Bloomberg story turns out to be largely incorrect - you can't just shrug and tell them, "Hey that stock is worthless, you shouldn't have owned any of it anyway."
- busterarm 8y ago
  It was delisted from NASDAQ. It's a pink sheet/OTC stock. That is the highest level of "buyer beware" caution flag you can give. They're not a foreign company like Nintendo that doesn't want to go through regulatory hurdles. They haven't been able to bring their accounting up to standard for over a year. If you think there's a "fair market value" of a company that can't meet basic financial regulatory and accounting practices that is anywhere above the price of toilet paper, then I suggest you don't put any money in the stock market.
  - throwawaymath 8y ago
    None of that detracts my point. The company's pre-existing financial standing is not a suitable defense for loosening the standards of due diligence in journalism. If you're in a store and you break an item that was already scratched, you don't get a pass.
    - busterarm 8y ago
      https://www.bloomberg.com/news/articles/2018-10-09/new-evidence-of-hacked-supermicro-hardware-found-in-u-s-telecom https://www.bloomberg.com/news/articles/2018-10-09/new-evide...
    - busterarm 8y ago
      SMCI has 84% institutional ownership and only 20% held by insiders. Nobody really thinks it's worth anything but the large holders don't have to write down yet and probably are diversified across the industry. The market cap is like half a bil -- that's _tiny_ for a company as big as SuperMicro...even at the bil it was before the article. The stock is garbage.
      - throwawaymath 8y ago
        Again, that doesn't really have anything to do with my core point.

coldcode 8y ago

https://appleinsider.com/articles/18/10/08/security-researcher-cited-in-bloombergs-china-spy-chip-investigation-casts-doubt-on-storys-veracity https://appleinsider.com/articles/18/10/08/security-research... One guy named as a source in the original article does not accept the story as written.

_Codemonkeyism 8y ago
One guy named as a source in the original article claims the backdoor sounds too complicated too him, not that he "doesn't accept the story as written".
- close04 8y ago
  This hack is suggested to be an almost 1:1 copy of the a didactic PoC attack the source security researcher devised. The implication being that the article is based on his story rather than on any real fact. To this point Bloomberg has presented 0 evidence of any of this. You have to understand how the burden of proof works, you can't throw a rock in the pond and expect others to jump in and retrieve it. Bloomberg made the claim, Bloomberg has to support it. Until they do I will take everything they write/claim with a tablespoon of salt. From my perspective it may very well be an attempt to hit Supermicro and nothing more. The fact that Apple or Amazon are expected to show evidence that a yet unsubstantiated claim from Bloomberg is not real shows how low people set the bar for what reliable information means.
  - _Codemonkeyism 8y ago
    I love your commanding tone, reminds me of my time with the military. "You have to understand how the burden of proof works, [...]" I don't HAVE to do anything you say, thank god.
    - close04 8y ago
      And you’re doing a great job at that. I was giving you a hand when you obviously needed it, a thank tou would have sufficed. But in all honesty not understanding how something works makes your opinion on the topic about as valuble as a turd in the rain. Understanding how things work before attempting to pass judgement is “just” a matter of common sense and decency. But since no superior ordered them and you don’t have to have them, here we are.

_Codemonkeyism 8y ago

"At this point, it seems like Apple and Amazon have hard facts" Hard facts? Which ones? An independent review of all server hardware by an external auditor? Call me stupid but I don't think companies can audit themselves if a lot of money is at stake. Not saying Apple is wrong, but for now we still have "This isn't the case because we say so, believe us." nothing more. It will be interesting if Bloomberg has a followup or if they fold.

craftyguy 8y ago
To be fair, the accuser (bloomberg) still has "this is the case because we say so, believe us."

saudioger 8y ago

Uhh, Apple and Amazon are providing very few hard facts... and have a HUGE amount to lose if the story is true. I wouldn't take anything as certainty at this point, not even close.