I use Instagram to make quick posts when I don’t have much time, but now I can go more into details on my thoughts on this position.
Why I thought the Bloomberg story was bogus
I thought the story by Bloomberg was bogus for a number of reasons, including:
The described hardware attack method just didn’t make sense when other better methods were available
All affected companies categorically deny the claims
There was no evidence presented by Bloomberg at all. Not even a named source
It seemed like a case of bad journalism of possibly even a planted story in the context of the trade dispute with China.
Possibility of profit?
My expectation was that the story was not true, so could I buy the shares in anticipation that the story would be proven false and that the share price would recover? There were still risks:
I could be wrong and the story could be true
Even if the story is not true, it might not be conclusively rebutted and doubts remain
Even if the story was proven to be false, the story might still have an impact as if it were true
On the balance of probabilities, I thought it was worth the risk to buy shares in SuperMicro. However, the position I was willing to take was small. Even without the Bloomberg story, the company has a number of issues including ones which led to suspension of trading on the NASDAQ.