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Get filing alertsSuper Micro raises via mandatory convertible preferred stock with 7% dividend
Filed June 15, 2026 · Period ending June 10, 2026 · ~1 min read
Key Changes
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SMCI issued 75M depositary shares representing in mandatory convertible preferred stock with 7% annual dividend, payable quarterly starting Sept 2026. Preferred shares automatically convert to common stock in June 2029.
Item 3.03 verify on EDGAR → -
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Common stock dividends and buybacks are now prohibited until all preferred dividends are paid. This restriction remains in effect as long as any preferred shares are outstanding, materially changing cash distribution priorities.
Item 5.03 verify on EDGAR → -
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Each preferred share converts to 30.3-36.4 common shares in June 2029 based on stock price performance over a 20-day averaging period. This represents potential dilution of up to 136.4M common shares at the high end of the conversion range.
Item 3.03 verify on EDGAR → -
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In liquidation, preferred holders receive $1,000 per share plus unpaid dividends before common shareholders receive anything, reducing common shareholder recovery in distress scenarios.
Item 3.03 verify on EDGAR → -
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Underwriters received a 30-day option to purchase an additional 11.25M depositary shares (15% greenshoe), which could increase total proceeds to if fully exercised.
Item 1.01 verify on EDGAR →
Summary
Super Micro Computer completed a capital raise through mandatory convertible preferred stock, one of the largest such offerings in the technology sector. The company issued 75 million depositary shares, each representing a fractional interest in preferred stock that pays a 7% annual dividend and automatically converts to common stock in June 2029.
The conversion ratio ranges from 30.3 to 36.4 common shares per preferred share, depending on stock price performance, representing potential dilution of up to 136 million common shares. Common shareholders face two immediate impacts: dividend restrictions and future dilution.
Until all preferred dividends are paid, SMCI cannot pay common dividends or repurchase shares, fundamentally altering capital allocation priorities. The company now has a annual dividend obligation on the preferred stock through 2029. Additionally, the automatic conversion in three years will dilute existing common shareholders, with greater dilution if the stock price underperforms. Investors should monitor whether SMCI uses the proceeds for growth investments that generate returns exceeding the 7% preferred dividend cost, and watch quarterly preferred dividend payments as a test of cash generation. The conversion mechanics mean common shareholders benefit if the stock appreciates significantly above current levels by 2029, but face maximum dilution if it stagnates or declines.
Section-by-Section Diff
Event · Item 5.03 — Amendments to Articles of Incorporation or Bylaws
Super Micro Computer filed an 8-K disclosing amendments to articles of incorporation or bylaws, with details cross-referenced to Item 3.03.
Added in current filing · verify on EDGAR →
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year The information set forth under Item 3.03 of this Current Report on Form 8-K is hereby incorporated by reference in this Item 5.03.
The company disclosed amendments to its articles of incorporation or bylaws, or a change in fiscal year. The specific details are cross-referenced to Item 3.03 of this same 8-K filing, which is not included in the provided text. This type of disclosure typically involves governance changes, structural modifications, or fiscal year adjustments that may affect shareholder rights or reporting periods.
Event · Item 3.03 — Material Modification to Rights of Security Holders
Item 3.03 — Material Modification to Rights of Security Holders filed; see Key Changes for terms.
Added in current filing · verify on EDGAR →
On June 15, 2026, the Company filed the Certificate of Designations with the Secretary of State of the State of Delaware to establish the preferences, limitations and relative special rights of the Mandatory Convertible Preferred Stock. The Certificate of Designations became effective upon filing.
Super Micro Computer issued a new class of mandatory convertible preferred stock by filing a Certificate of Designations with Delaware. This creates a new security with specific rights and preferences that rank senior to common stock. The preferred stock will automatically convert to common shares in 2029.
Added in current filing · verify on EDGAR →
The Mandatory Convertible Preferred Stock will accumulate dividends (which may be paid in cash or, subject to certain limitations, in shares of Common Stock or in any combination of cash and Common Stock) at an annual rate of 7.00% on the liquidation preference thereof, which is $1,000 per share, payable when, as and if declared by the Board of Directors of the Company, or an authorized committee thereof, on March 1, June 1, September 1 and December 1 of each year, commencing on, and including, September 1, 2026 and ending on, and including, June 1, 2029.
The preferred stock carries a 7% annual dividend on a $1,000 per share liquidation preference, payable quarterly starting September 2026 through June 2029. Dividends can be paid in cash, common stock, or a combination, subject to board declaration. This represents a significant ongoing cash or dilution obligation.
Added in current filing · verify on EDGAR →
Unless earlier converted, each outstanding share of Mandatory Convertible Preferred Stock will automatically convert on the second business day immediately following the last trading day of the Final Averaging Period (as defined below) into between 30.3040 and 36.3640 shares of Common Stock (and, correspondingly, each Depositary Share will automatically convert into between 1.5152 and 1.8182 shares of Common Stock), subject to customary anti-dilution adjustments. The number of shares of Common Stock issuable upon such automatic conversion will be determined based on the average volume-weighted average price of a share of Common Stock over the 20 consecutive trading-day period beginning on, and including, the 21st scheduled trading day prior to June 1, 2029 (the “Final Averaging Period”).
Each preferred share will automatically convert to between 30.3040 and 36.3640 common shares in June 2029, with the exact ratio determined by the common stock's average price over a 20-day period. This represents potential dilution of 30-36 common shares per preferred share outstanding, with the conversion ratio inversely related to stock price performance. Note: these figures were previously disclosed in the company's Jun 12, 2026 8-K.
Event · Item 1.01 — Entry into a Material Definitive Agreement
Item 1.01 — Entry into a Material Definitive Agreement filed; see Key Changes for terms.
Added in current filing · verify on EDGAR →
On June 10, 2026, Super Micro Computer, Inc., a Delaware corporation (the “Company”) entered into an underwriting agreement (the “Underwriting Agreement”) with J.P. Morgan Securities LLC and Goldman Sachs & Co. LLC, as representatives of the several underwriters named therein, pursuant to which the Company agreed to issue and sell 75,000,000 depositary shares (the “Depositary Shares”), each representing a 1/20th interest in a share of the Company’s 7.00% Series A Mandatory Convertible Preferred Stock, liquidation preference $1,000 per share, par value $0.001 per share
Super Micro issued 75 million depositary shares representing fractional interests in mandatory convertible preferred stock with a 7.00% dividend rate and $1,000 liquidation preference per underlying preferred share. Each depositary share represents 1/20th of a preferred share, implying a $50 liquidation preference per depositary share and $1,000 in gross proceeds. The offering closed on June 15, 2026.
Added in current filing · verify on EDGAR →
In connection with the Depositary Shares Offering, the Company filed a certificate of designations (the “Certificate of Designations”) with the Secretary of State of the State of Delaware, including a form of certificate for the Mandatory Convertible Preferred Stock (the “Form of Certificate”), to establish the preferences, limitations, and relative special rights of the Mandatory Convertible Preferred Stock. The Certificate of Designations became effective upon filing.
Super Micro filed the certificate of designations with Delaware to formally establish the rights and preferences of the new Series A Mandatory Convertible Preferred Stock. This document governs conversion terms, dividend rights, liquidation preferences, and other material terms of the security.
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Added in current filing · verify on EDGAR →
In connection with the Depositary Shares Offering, the Company entered into a deposit agreement (the “Deposit Agreement”) dated June 15, 2026 by and among the Company, Computershare Trust Company, N.A. and Computershare Inc., acting jointly as depositary (the “Depositary”), and the holders from time to time of depositary receipts for Depositary Shares
Super Micro established a deposit agreement with Computershare as depositary to manage the depositary share structure. This agreement governs how the underlying preferred shares are held and how depositary receipts representing fractional interests are issued and transferred to investors.
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Figures/quotes linked to EDGAR · Narrative written by AI · Jun 15, 2026 · How we verify