WEBVTT - The Collapse of SMCI: A Historic Cautionary Tale

0:00:01.240 --> 0:00:01.600
<v Speaker 1>Earners.

0:00:01.639 --> 0:00:02.000
<v Speaker 2>What's up.

0:00:02.080 --> 0:00:04.560
<v Speaker 3>You ever walk into a small business and everything just

0:00:04.720 --> 0:00:07.880
<v Speaker 3>works like The checkout is fast, the receipts are digital,

0:00:08.400 --> 0:00:11.399
<v Speaker 3>tipping is a breeze, and you're out the door before

0:00:11.400 --> 0:00:15.560
<v Speaker 3>the line even builds. Odds are they're using Square. We

0:00:15.720 --> 0:00:18.280
<v Speaker 3>love supporting businesses that run on Square because it just

0:00:18.280 --> 0:00:21.520
<v Speaker 3>feels seamless. Whether it's a local coffee shop, a vendor

0:00:21.560 --> 0:00:23.840
<v Speaker 3>at a pop up market, or even one of our

0:00:23.880 --> 0:00:27.560
<v Speaker 3>merch partners, Square makes it easy for them to take payments,

0:00:27.760 --> 0:00:31.480
<v Speaker 3>manage inventory, and run their business with confidence, all from

0:00:31.600 --> 0:00:35.000
<v Speaker 3>one simple system. If you're a business owner or even

0:00:35.080 --> 0:00:38.600
<v Speaker 3>just thinking about launching something soon, Square is hands down

0:00:38.640 --> 0:00:41.680
<v Speaker 3>one of the best tools out there to help you start, run,

0:00:41.920 --> 0:00:45.240
<v Speaker 3>and grow. It's not just about payments, it's about giving

0:00:45.240 --> 0:00:47.519
<v Speaker 3>you time back so you can focus.

0:00:47.159 --> 0:00:48.760
<v Speaker 2>On what matters most Ready.

0:00:48.760 --> 0:00:52.159
<v Speaker 3>To see how Square can transform your business, visit Square

0:00:52.240 --> 0:00:56.760
<v Speaker 3>dot com backslash go backslash eyl to learn more that

0:00:56.960 --> 0:01:02.400
<v Speaker 3>Square dot com backslash, go backslash eyl. Don't wait, don't hesitate.

0:01:02.520 --> 0:01:04.880
<v Speaker 3>Let's Square handle the back end so you can keep

0:01:04.920 --> 0:01:11.000
<v Speaker 3>pushing your vision forward. This episode is brought to you

0:01:11.040 --> 0:01:13.320
<v Speaker 3>by P and C Bank, a lot of people think

0:01:13.360 --> 0:01:17.240
<v Speaker 3>podcasts about work are boring, and sure they definitely can be,

0:01:17.760 --> 0:01:21.000
<v Speaker 3>but understanding of professional's routine shows us how they achieve

0:01:21.080 --> 0:01:25.280
<v Speaker 3>their success little by little, day after day. It's like

0:01:25.360 --> 0:01:28.160
<v Speaker 3>banking with P and C Bank. It might seem boring

0:01:28.160 --> 0:01:31.080
<v Speaker 3>to save, plan and make calculated decisions with your bank,

0:01:31.440 --> 0:01:33.920
<v Speaker 3>but keeping your money boring is what helps you live

0:01:34.000 --> 0:01:38.080
<v Speaker 3>a more happily fulfilled life. P and C Bank Brilliantly

0:01:38.160 --> 0:01:42.720
<v Speaker 3>Boring since eighteen sixty five. Brilliantly Boring since eighteen sixty

0:01:42.720 --> 0:01:46.000
<v Speaker 3>five is a service mark of the PNC Financial Service Group, Inc.

0:01:46.480 --> 0:01:49.840
<v Speaker 3>P and C Bank National Association Member FDIC.

0:01:51.720 --> 0:01:59.920
<v Speaker 4>Let's talk about SMCI debacle super Micro. It's a historic

0:02:00.560 --> 0:02:06.600
<v Speaker 4>collapse and a cautionary tale. So it peaked out one

0:02:06.640 --> 0:02:09.839
<v Speaker 4>hundred and twenty two dollars. It's down to twenty six

0:02:09.880 --> 0:02:10.959
<v Speaker 4>dollars right now.

0:02:11.400 --> 0:02:13.679
<v Speaker 2>And it's split, and it's split, so it was obviously higher.

0:02:14.120 --> 0:02:19.400
<v Speaker 4>Talks of being delisted, and this is like speaks to

0:02:19.639 --> 0:02:23.640
<v Speaker 4>a lot of people fear of the overhype.

0:02:23.600 --> 0:02:28.799
<v Speaker 1>Of artificial intelligence. So what can we learn from SMCI.

0:02:29.320 --> 0:02:31.760
<v Speaker 5>It's a lesson that I've repeat it forever. Please write

0:02:31.760 --> 0:02:35.880
<v Speaker 5>this down. There is no feeling the blank killer. So

0:02:36.160 --> 0:02:39.080
<v Speaker 5>I know both you anybody who was a Brady killer,

0:02:39.600 --> 0:02:42.960
<v Speaker 5>Peyton Mann and killer Jordan killer, it never happened.

0:02:43.520 --> 0:02:45.200
<v Speaker 2>Well are you who are you saying that they were

0:02:45.240 --> 0:02:45.720
<v Speaker 2>going to kill?

0:02:45.800 --> 0:02:49.720
<v Speaker 5>If you say that, n video and a lot of times,

0:02:49.800 --> 0:02:52.799
<v Speaker 5>and we've seen this in the constant space in the

0:02:52.880 --> 0:02:55.880
<v Speaker 5>last four or five years. When you try and recreate

0:02:55.880 --> 0:03:01.280
<v Speaker 5>a other people's intellectual property. You may not know and

0:03:01.320 --> 0:03:03.799
<v Speaker 5>I probably shouldn't say this, but it makes the originator

0:03:03.880 --> 0:03:08.919
<v Speaker 5>of the intellectual property more valuable. So I know it's

0:03:08.919 --> 0:03:10.679
<v Speaker 5>been a lot of spin offs of even us. It's

0:03:10.680 --> 0:03:12.120
<v Speaker 5>made to show more valuable.

0:03:12.160 --> 0:03:12.400
<v Speaker 1>Right.

0:03:12.800 --> 0:03:14.680
<v Speaker 5>So when people are looking at a sector and saying, hey,

0:03:14.720 --> 0:03:17.280
<v Speaker 5>what can I do? I missed out in Vidia, let

0:03:17.280 --> 0:03:19.520
<v Speaker 5>me get the third best thing. The best thing is

0:03:19.560 --> 0:03:22.000
<v Speaker 5>to listen for the best price to get in on

0:03:22.160 --> 0:03:25.520
<v Speaker 5>the market leader. Once again, we are investing in companies

0:03:25.520 --> 0:03:28.560
<v Speaker 5>that are going to move the GDP of America. If

0:03:28.560 --> 0:03:30.160
<v Speaker 5>I ask a simple question, if I was running for

0:03:30.200 --> 0:03:34.960
<v Speaker 5>president and if my initiative was to bring greatness back

0:03:35.000 --> 0:03:38.200
<v Speaker 5>to America through tech, is in Vidia probably the number

0:03:38.240 --> 0:03:39.960
<v Speaker 5>one company that's going to do that over the next

0:03:40.000 --> 0:03:40.840
<v Speaker 5>three or four years.

0:03:41.160 --> 0:03:42.960
<v Speaker 1>Yes, And no, most of us will say yes. Right,

0:03:43.640 --> 0:03:44.280
<v Speaker 1>So to.

0:03:44.480 --> 0:03:48.680
<v Speaker 5>Actually bet against Nvidia and buy into SMCI is technically

0:03:48.720 --> 0:03:50.000
<v Speaker 5>a short against America.

0:03:51.680 --> 0:03:53.360
<v Speaker 2>Give it. Can I give a little push back?

0:03:53.760 --> 0:03:55.960
<v Speaker 1>Sure, we're friends.

0:03:57.960 --> 0:03:59.240
<v Speaker 2>Because it's an interesting case.

0:03:59.600 --> 0:04:02.240
<v Speaker 3>Yes, debacle, but we got to look at the reason

0:04:02.280 --> 0:04:06.120
<v Speaker 3>why it is falling. Yes, and it's because of the reporting, right,

0:04:06.280 --> 0:04:09.520
<v Speaker 3>Like they've had issues with they're reporting a ten K.

0:04:09.720 --> 0:04:12.400
<v Speaker 3>They can't find it, which is the form to report.

0:04:12.800 --> 0:04:15.160
<v Speaker 3>They can't they can't find it. They hired Ernest Young

0:04:15.200 --> 0:04:19.719
<v Speaker 3>as an independent orditor. Young they said, we're not even

0:04:19.760 --> 0:04:21.920
<v Speaker 3>doing this, we're leaving stop pulls again.

0:04:22.960 --> 0:04:26.200
<v Speaker 2>So are the numbers real? We don't know. I don't

0:04:26.240 --> 0:04:27.520
<v Speaker 2>know if they're a competitor to.

0:04:27.560 --> 0:04:33.880
<v Speaker 3>In video because they partnered within video and.

0:04:32.200 --> 0:04:32.920
<v Speaker 1>Do a lot of ops.

0:04:32.960 --> 0:04:35.400
<v Speaker 3>Partner Well, this is true, but we got to we

0:04:35.480 --> 0:04:36.719
<v Speaker 3>have to know what they actually do.

0:04:36.839 --> 0:04:37.000
<v Speaker 1>Right.

0:04:37.040 --> 0:04:40.160
<v Speaker 3>So from a technical standpoint, and video makes the GPUs,

0:04:40.200 --> 0:04:45.760
<v Speaker 3>we've gone over that. Yes, super Semi helps accelerate the

0:04:45.839 --> 0:04:48.360
<v Speaker 3>speed of that GPU by creating the infrastructure for it.

0:04:48.400 --> 0:04:51.599
<v Speaker 3>So imagine like the casing for this chip. That's what

0:04:51.640 --> 0:04:55.320
<v Speaker 3>they do is they'd a supplier of it. So it

0:04:55.360 --> 0:04:58.359
<v Speaker 3>begs the question, right, the numbers, we don't know. In fact,

0:04:58.560 --> 0:05:01.000
<v Speaker 3>they said that they were going to report November fourth

0:05:01.040 --> 0:05:04.560
<v Speaker 3>of twenty twenty five. They meant November fifth, tomorrow, So

0:05:04.560 --> 0:05:06.720
<v Speaker 3>they're gonna we're gonna actually see what the numbers. In fact,

0:05:06.760 --> 0:05:12.040
<v Speaker 3>if they don't report, they risk being delisted because of

0:05:10.640 --> 0:05:15.359
<v Speaker 3>the way the stock is falling. They've been delisted before.

0:05:16.000 --> 0:05:18.680
<v Speaker 3>This is not something new, which is not good news. Yeah, right,

0:05:18.760 --> 0:05:21.320
<v Speaker 3>twenty eighteen they were delisted. They came back, obviously with

0:05:21.360 --> 0:05:23.839
<v Speaker 3>the surge of AI, the partnership with the video. The

0:05:23.960 --> 0:05:26.760
<v Speaker 3>question and this is why a little pushback is like, yes,

0:05:27.040 --> 0:05:28.760
<v Speaker 3>we were not sure about the numbers, but are we

0:05:28.839 --> 0:05:30.039
<v Speaker 3>sure about their clients?

0:05:30.520 --> 0:05:33.520
<v Speaker 2>And VideA is the number one client? Yeah, Microsoft is

0:05:33.560 --> 0:05:37.000
<v Speaker 2>a client, Yes, AMD is a client.

0:05:37.600 --> 0:05:39.120
<v Speaker 1>But for how much? Yes?

0:05:39.320 --> 0:05:39.880
<v Speaker 2>They all are?

0:05:40.120 --> 0:05:40.680
<v Speaker 1>They agree?

0:05:41.240 --> 0:05:44.160
<v Speaker 2>Right? And so if they're ordering at that rate?

0:05:45.040 --> 0:05:45.320
<v Speaker 1>Right?

0:05:45.400 --> 0:05:48.480
<v Speaker 3>And in video Blackwell still hasn't come out, right, Well,

0:05:48.640 --> 0:05:51.760
<v Speaker 3>it hasn't released, and it's already talked about it's being

0:05:51.760 --> 0:05:56.320
<v Speaker 3>sold out. If the clients are real, I'm be I

0:05:56.360 --> 0:05:58.000
<v Speaker 3>want to see what the numbers are, right, we want

0:05:58.040 --> 0:05:59.520
<v Speaker 3>to see what the numbers are. But the client base

0:05:59.600 --> 0:06:02.000
<v Speaker 3>is still really well, it leaves that gap open if

0:06:02.200 --> 0:06:04.800
<v Speaker 3>companies are starting to leave and seeking. Alphab has already

0:06:04.800 --> 0:06:07.920
<v Speaker 3>reported that in videos had left no comment, but there

0:06:07.960 --> 0:06:10.280
<v Speaker 3>are some talks that they're going to start looking for

0:06:10.360 --> 0:06:13.080
<v Speaker 3>other people to help with the infrastructure and open the

0:06:13.120 --> 0:06:14.080
<v Speaker 3>door for us.

0:06:13.839 --> 0:06:15.240
<v Speaker 1>The kind way of saying, I'm gonna kick you off

0:06:15.279 --> 0:06:16.560
<v Speaker 1>for those of you don't know, so.

0:06:16.480 --> 0:06:17.600
<v Speaker 2>Then who's the next person?

0:06:17.920 --> 0:06:20.760
<v Speaker 5>Yes, and that's the real cold Now to your point,

0:06:21.360 --> 0:06:25.000
<v Speaker 5>great pushback, But when the investor class was looking for gains,

0:06:25.200 --> 0:06:26.560
<v Speaker 5>and this is why I say, you still have to

0:06:26.560 --> 0:06:29.680
<v Speaker 5>do your research and not just blindly chase gains. So

0:06:29.720 --> 0:06:32.039
<v Speaker 5>one day we're gonna have a whole conversation about what

0:06:32.160 --> 0:06:34.640
<v Speaker 5>happened to y'all love for NFTs not.

0:06:34.760 --> 0:06:36.080
<v Speaker 1>We got to get through the election first.

0:06:36.720 --> 0:06:39.080
<v Speaker 5>But when people missed out on the gains of in Vidio,

0:06:39.200 --> 0:06:41.080
<v Speaker 5>it was a lot of talk at the top of

0:06:41.160 --> 0:06:44.960
<v Speaker 5>the year of why didn't you call SMCI. Now, let's

0:06:45.000 --> 0:06:47.120
<v Speaker 5>be clear, they're not the only company in America who's

0:06:47.160 --> 0:06:47.760
<v Speaker 5>cooking the books.

0:06:47.800 --> 0:06:50.600
<v Speaker 1>They just got caught. But if the clients.

0:06:50.200 --> 0:06:54.240
<v Speaker 5>Structed allegedly allegedly, thank you for protecting me, that's gotcha

0:06:53.880 --> 0:06:59.440
<v Speaker 5>got But if you're not reporting properly can those partners

0:06:59.440 --> 0:07:04.680
<v Speaker 5>still remain by your side through the reporting? And I

0:07:04.720 --> 0:07:07.960
<v Speaker 5>ask everyone, Okay, if SMCI is going up as fast

0:07:07.960 --> 0:07:12.080
<v Speaker 5>of a rate as in Video, who's the CTO, who's

0:07:12.080 --> 0:07:15.600
<v Speaker 5>the CFO, who's the CEO? No one could answer that.

0:07:15.680 --> 0:07:18.760
<v Speaker 5>What's the profit margin? Most people couldn't answer it. So

0:07:18.800 --> 0:07:22.040
<v Speaker 5>if I lie to you, yeah, at some at a

0:07:22.080 --> 0:07:24.840
<v Speaker 5>certain point, given the tightness of the economy that they'll

0:07:24.960 --> 0:07:27.680
<v Speaker 5>probably announced after the election, I don't think any of

0:07:27.720 --> 0:07:31.560
<v Speaker 5>these companies can afford to have a partner that will

0:07:31.960 --> 0:07:35.320
<v Speaker 5>make such an egregious act in terms of their reporting.

0:07:35.960 --> 0:07:38.080
<v Speaker 3>So this is and this is what I think will happen,

0:07:38.240 --> 0:07:39.880
<v Speaker 3>And this is why I think it's super interesting to

0:07:39.880 --> 0:07:41.640
<v Speaker 3>see obviously the elections tomorrow, but I want to see

0:07:41.680 --> 0:07:44.400
<v Speaker 3>what happened with super Fancro. I think the CFO will

0:07:44.400 --> 0:07:48.480
<v Speaker 3>be fired. I think that will happen. For this level

0:07:48.520 --> 0:07:50.680
<v Speaker 3>of agreegiance, I think that will happen. They've already named

0:07:50.680 --> 0:07:52.480
<v Speaker 3>the new board, they've already said the CEO is going.

0:07:52.480 --> 0:07:52.920
<v Speaker 1>To take over.

0:07:55.240 --> 0:07:58.600
<v Speaker 3>But if it is the primary client, if in videos

0:07:58.640 --> 0:08:02.840
<v Speaker 3>is primary client, and we're still seeing growth inside of

0:08:02.880 --> 0:08:04.920
<v Speaker 3>the Nvidia and we already are expecting it and you

0:08:04.920 --> 0:08:06.600
<v Speaker 3>can see the price sockers are getting raised. I know

0:08:06.600 --> 0:08:11.040
<v Speaker 3>they report on the fourteen price raised until I hear

0:08:11.120 --> 0:08:13.960
<v Speaker 3>that they have replaced them. I'm interested to see what

0:08:14.080 --> 0:08:16.720
<v Speaker 3>those actual because they at some point they'll have to report,

0:08:16.720 --> 0:08:18.320
<v Speaker 3>and they said tomorrow. I want to see what those

0:08:18.400 --> 0:08:20.640
<v Speaker 3>numbers look like from an order standpoint, from a deal

0:08:20.680 --> 0:08:23.600
<v Speaker 3>flow standpoint, when it comes to predominantly in Vidia and

0:08:23.640 --> 0:08:27.000
<v Speaker 3>if not, if not, the inverse, I think is now

0:08:27.320 --> 0:08:30.240
<v Speaker 3>my target and you can put this in your watch list.

0:08:30.280 --> 0:08:34.520
<v Speaker 3>My target now is Dell. I think Dell, which is

0:08:35.280 --> 0:08:38.319
<v Speaker 3>another infrastructure company. If we look at super Micro.

0:08:38.440 --> 0:08:40.480
<v Speaker 5>Has had a great relationship with the White House for

0:08:40.520 --> 0:08:43.200
<v Speaker 5>a number of years. Yep, I think that is the

0:08:43.240 --> 0:08:44.079
<v Speaker 5>new target.

0:08:45.000 --> 0:08:47.719
<v Speaker 3>If we hear that they are no longer partnering with

0:08:47.760 --> 0:08:50.480
<v Speaker 3>sumerset super Micro, I think in Vidia and del I

0:08:50.480 --> 0:08:51.800
<v Speaker 3>will watch that closely.

0:08:52.040 --> 0:08:52.800
<v Speaker 1>Let me ask you a question.

0:08:52.880 --> 0:08:55.040
<v Speaker 5>If I told you guys for three years that I

0:08:55.120 --> 0:08:59.160
<v Speaker 5>made sixteen million dollars a month and it came out

0:08:59.200 --> 0:09:02.800
<v Speaker 5>to that I just made two Even though two million

0:09:02.880 --> 0:09:04.640
<v Speaker 5>is a lot, the fact that I lied about making

0:09:04.640 --> 0:09:09.680
<v Speaker 5>sixteen a month will probably get me uninvited from some dinners.

0:09:09.720 --> 0:09:11.880
<v Speaker 2>Right. It's the trust factor.

0:09:12.760 --> 0:09:15.480
<v Speaker 5>So if if you're in the hottest space on Earth,

0:09:16.040 --> 0:09:20.079
<v Speaker 5>why would you split the stock at your apex and

0:09:20.160 --> 0:09:26.920
<v Speaker 5>then you lost the tenth.

0:09:24.920 --> 0:09:26.640
<v Speaker 2>But is it indicative of the space.

0:09:27.600 --> 0:09:28.920
<v Speaker 1>No, it's indicative of them.

0:09:29.040 --> 0:09:31.319
<v Speaker 2>Okay, because but that's for both sides.

0:09:31.520 --> 0:09:34.840
<v Speaker 3>You're saying that either win or laws, that that is

0:09:34.880 --> 0:09:36.680
<v Speaker 3>the stand that should be going for.

0:09:37.240 --> 0:09:38.160
<v Speaker 1>Well, let's do let's do this.

0:09:38.520 --> 0:09:41.400
<v Speaker 4>Let's let's talk about some finance stuff. But I also

0:09:41.480 --> 0:09:45.720
<v Speaker 4>I want to I want to ask questions. Get you

0:09:45.720 --> 0:09:48.120
<v Speaker 4>guys take on it from We did a dope interview

0:09:48.160 --> 0:09:51.560
<v Speaker 4>with the guys a business untitled shout Out to Them.

0:09:51.800 --> 0:09:55.800
<v Speaker 1>Yes, very dope conversation. Check it out if you haven't.

0:09:56.080 --> 0:09:59.720
<v Speaker 6>An illegal alien from Guatemala charged with raping a child

0:09:59.720 --> 0:10:02.959
<v Speaker 6>in Mouth, Massachusetts. An MS thirteen gang member from Al

0:10:03.040 --> 0:10:07.840
<v Speaker 6>Salvador accused of murdering a Texas man of Venezuelan charged

0:10:07.880 --> 0:10:11.760
<v Speaker 6>with filming and selling child pornography in Michigan. These are

0:10:11.840 --> 0:10:15.320
<v Speaker 6>just some of the heinous migrant criminals caught because of

0:10:15.360 --> 0:10:19.079
<v Speaker 6>President Donald J. Trump's leadership. I'm Christy nom the United

0:10:19.080 --> 0:10:23.840
<v Speaker 6>States Secretary of Homeland Security. Under President Trump. Attempted illegal

0:10:23.880 --> 0:10:27.520
<v Speaker 6>border crossings are at the lowest levels ever recorded, and

0:10:27.600 --> 0:10:30.960
<v Speaker 6>over one hundred thousand illegal aliens have been arrested. If

0:10:30.960 --> 0:10:34.600
<v Speaker 6>you are here illegally, your next you will be fine

0:10:34.679 --> 0:10:38.800
<v Speaker 6>nearly one thousand dollars a day, imprisoned, and deported. You

0:10:38.840 --> 0:10:42.400
<v Speaker 6>will never return. But if you register using our CBP

0:10:42.559 --> 0:10:45.280
<v Speaker 6>home app and leave now, you could be allowed to

0:10:45.360 --> 0:10:50.160
<v Speaker 6>return legally. Do what's right, leave now. Under President Trump

0:10:50.320 --> 0:10:53.920
<v Speaker 6>America's laws, border and families will be protected.

0:10:54.000 --> 0:10:56.160
<v Speaker 1>Sponsored by the United States Department of Homeland Security,