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For the past two years, Super Micro Computer (Nasdaq: SMCI) was riding the AI wave building high-end servers for businesses that needed more computing power. It came as a shock when its auditor Ernst & Young resigned last month, saying they were “unwilling to be associated with the financial statements prepared by management.” Over the summer, Hindenburg Research had issued a short report accusing the company of accounting malpractice. For long-time Super Micro investors, it was déjà vu when similar accounting violations resulted in a fine and a settlement with the Securities Exchange Commission (SEC) in 2020.
Today, Super Micro issued a press release about setting up a special committee to investigate the concerns raised by Ernst & Young. In the same press release, the San Jose-based computer maker also lowered its revenue and earnings forecast for the upcoming quarter blaming shortages of Nvidia’s (Nasdaq: NVDA) latest AI processors.
The company was recently given 60 days to file or submit a plan to file a financial report with the SEC. If it misses the deadline of November 16th, the stock may get delisted. All of the uncertainty have led to another round of downgrades of the stock by analysts.
Super Micro Computer is trading at $21 a share, well below its 52-week high of $122 a share.
