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That's not the point. Basic principles of integrity and accountability mandate that journalists be responsible for carefully weighing the consequences of their
by 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 agoIt 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 agoNone 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 agohttps://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 agoSMCI 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 agoAgain, that doesn't really have anything to do with my core point.