Financial Woes Plague AI Server-Maker Super Micro
Delayed Filing Sparks Concerns
Super Micro Computer, a leading AI server manufacturer, has announced a delay in filing its financial report for the September quarter. This move comes as the company scrambles to find a new auditor amidst threats of delisting. The news sent the company’s shares tumbling by 4% in premarket trading, exacerbating a downward trend that has seen the stock plummet 55% since October.
Auditor Resignation Sparks Governance Concerns
The resignation of Ernst & Young as auditor in October raised red flags about Super Micro’s governance, transparency, and internal control over financial reporting. A special committee was set up to investigate these concerns, but found no evidence of fraud earlier this month. Despite this, the company’s shares have remained under pressure due to concerns over its accounting practices.
Time Crunch for Compliance
Super Micro needs additional time to select and engage a new auditor and complete its assessment of internal controls over financial reporting as of June 30, 2024. The company received a notification from Nasdaq on September 17, stating that it was not in compliance with listing rules. Super Micro has 60 days to file its annual report or submit a plan to regain compliance.
AI-Linked Stock Rally Loses Steam
Super Micro’s shares had surged more than three-fold in 2023, making it one of the biggest beneficiaries of the AI-linked stock rally. However, the company’s accounting woes have taken a toll on its stock performance. Hindenburg Research’s disclosure of a short position in August, alleging “accounting manipulation,” has only added to the pressure.
Uncertain Future Ahead
As Super Micro navigates these challenging times, its future remains uncertain. The company’s ability to find a new auditor and address its accounting concerns will be crucial in determining its fate. Will Super Micro be able to regain the trust of investors and get back on track, or will it succumb to the delisting threat? Only time will tell.
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