Feb. 5 at 3:28 AM
$SMCI A useful way to think about this is to treat companies like people.
If someone owns a house worth
$1,000,000 and has
$1,000,000 in liabilities, their current net worth is zero.
But if that same property is expected to be worth
$2,000,000 in the future, the market does not wait until that appreciation happens to recognize the value, the expectation of future value is what matters.
This is why companies like
$DELL and
$PLTR trade at valuations that cannot be explained by static balance sheet metrics alone. Their market value reflects future earnings power, not today’s net assets (Total Equity).
In Dell’s case, significant liabilities compress equity today and dampen volatility, but that does not imply the business has no value it reflects how leverage, growth expectations, and cash-flow durability are weighed by markets.
Markets don’t wait for clean financials, they wait for fear to be wrong.
SMCI is currently being evaluated through a narrow, near term lens.
