Super Micro Takes Steps to Avoid Delisting from Nasdaq
In a significant move, Super Micro Computer (SMCI) submitted a compliance plan to the Securities and Exchange Commission (SEC) on Monday, aiming to prevent delisting from the Nasdaq exchange. The plan outlines the company’s strategy to submit delayed filings to the SEC and become current with its periodic reports within the allotted timeframe.
A Crucial Deadline Met
As reported by Barron’s on Friday, Super Micro was expected to submit its plan by Monday’s deadline. The company’s shares responded positively, surging over 25% in after-hours trading and roughly 16% during regular trading on Monday.
Challenges Ahead
Despite this positive development, Super Micro faces significant challenges. The company’s shares have plummeted approximately 65% over the past three months, erasing earlier gains of up to 300% this year. SMCI stock is now down over 20% in 2024.
New Auditor Appointment
In another key move, Super Micro announced the appointment of BDO as its new auditor, replacing EY, which resigned in late October. This change comes amid concerns raised by short seller firm Hindenburg Research in August about potential accounting malpractices, export control violations, and questionable relationships between top executives and Super Micro partners.
Investigation and Delayed Filings
The company is reportedly under investigation by the Department of Justice, and has delayed filing its annual 10-K report to the SEC. Last week, Super Micro also delayed filing its quarterly 10-Q report. These developments have sent shares tumbling, with EY’s resignation pushing the stock down over 30% in a single day in late October.
Product Updates and Partnerships
On a more positive note, Super Micro announced product updates during the Supercomputing Conference in Atlanta, including its next-generation AI servers using Nvidia Blackwell chips. CEO Charles Liang highlighted the company’s expertise and capacity to deploy large-scale liquid-cooled AI data center projects.
Nvidia Earnings Ahead
Nvidia, a key partner for Super Micro, is set to report its fiscal third-quarter earnings on Wednesday. Super Micro’s fortunes are closely tied to the growth of the artificial intelligence market, which propelled sales for its AI servers and other AI tech.
Growth Expectations
Despite current challenges, analysts expect Super Micro’s earnings to grow over 40% in the 2025 fiscal year, with sales surging around 70%. The company’s adjusted earnings rose nearly 90% to $2.21 per share, and revenue soared 110% to $15 billion in its fiscal year 2024.
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