An Indicted Co-Founder, a $5.6 Billion Raise and a Probe of Super Micro's Board

Kahn Swick & Foti, the New Orleans securities firm whose partners include former Louisiana attorney general Charles C. Foti Jr., said September 28 that it is investigating whether Super Micro's officers and directors breached their fiduciary duties to shareholders or otherwise violated state or federal law ¹. The target is the boardroom itself, six months after federal prosecutors indicted the company's co-founder. KSF ranks among the top ten U.S. plaintiff firms by total settlement value ¹: the plaintiffs' bar is paid when boards settle, which is the other half of who pays here.

The boardroom, not just the company

The indictment unsealed March 19↗ charges Yih-Shyan "Wally" Liaw, Super Micro's co-founder, director and senior vice president of business development, with Ruei-Tsang Chang, a general manager in its Taiwan office, and Ting-Wei Sun, a third-party broker and fixer, of diverting roughly $2.5 billion of servers housing U.S. AI technology to customers in China between 2024 and 2025 ¹. Liaw and Sun pleaded not guilty in April; Chang has not been apprehended; Liaw's trial is set for March 2027 ²³. A securities class action over the same period continues ¹.

A review that clears, indictments that accuse

On August 20 the board's independent review↗, co-led by lead independent director Scott Angel and audit-committee chair Tally Liu and run by Munger, Tolles & Olson with AlixPartners, found no evidence any current senior manager knew of the alleged diversion ². It was the second board review in two years to clear management ³. The record around it stayed busy: June brought a federal grand jury subpoena covering Liaw and the others indicted, plus an SEC subpoena for customer documents, and the company reports terminations in sales, technical support and business development ³.

Taiwan charges nine, two of them ex-employees

Four days after the review, Taiwanese prosecutors charged nine people↗, two of them Super Micro employees the company calls former, over B300 servers routed through Indonesia, Japan and Hong Kong into China ⁴. Super Micro itself is not a defendant in the U.S. case ⁵.

Shareholders already paid for the ramp

Operations consumed $6.8 billion of cash in fiscal 2026 ⁶. The June financing, announced as a $7 billion package, sent the stock down 7 percent in after-hours trading on June 9 ⁷. It delivered a $5.6 billion equity raise, and the $4.2 billion mandatory convertible lifts the guided diluted share count to 761 million from 721 million ⁶. On those numbers, the share count is doing the fiscal 2027 funding ⁶.

Demand is real, and the guide points higher

The demand underneath is real. Revenue rose 77.8 percent to $39.06 billion in fiscal 2026, inventory ended June at a record $12.9 billion, and management guided fiscal 2027 to $65 billion to $72 billion↗, with $14.5 billion to $15.5 billion due in the September quarter ⁶⁸. Nvidia's Vera Rubin NVL72 racks began shipping September 23 ⁵.

The quarter that closed today decides it

The stock closed September 25 at $43.26, above its $42.38 mean target, resting on senior vice president Michael Staiger's one-word answer, "Yes, 65," to whether that revenue funds itself; chief executive Charles Liang allows that above $80 billion the company may need capital ⁵⁶. Last year's September-quarter report landed November 4 ⁵. Two readings settle it: operating cash flow, after June's $747 million inflow ⁶, and any tap of the at-the-market equity program, which management says it has no current plans to use ⁶.