Recently, the stock price of Super Micro Computer, Inc. (SMCI) has been plummeting. On October 31st, Super Micro Computer closed with a 11.97% decline, trading at $29.11. This drop stems from the resignation of its auditing firm, Ernst & Young, which has left the company, after a series of setbacks, at risk of being delisted by Nasdaq.
In March of this year, Super Micro Computer successfully joined the S&P 500 index, but since then, the company's business situation has been less than optimistic. According to a non-compliance notice from Nasdaq in September, Super Micro Computer must submit a plan to regain compliance by November 16th, or face the prospect of being delisted for the second time within five years.
Ernst & Young's recent resignation from Super Micro Computer has drawn widespread attention. The conflict between the two began in late July when Ernst & Young expressed concerns about Super Micro's internal financial controls, corporate governance, and transparency. In response, Super Micro Computer established a special committee to investigate these issues. However, Ernst & Young ultimately stated in their resignation letter that they could no longer trust the statements of Super Micro's management and audit committee, and thus could not continue to support the company's financial statements.
Despite these fluctuations, Super Micro Computer has benefited from the high demand for AI technology over the past year, successfully ranking 498th in the Fortune 500. As a significant partner of Nvidia, Super Micro Computer has integrated Nvidia's technology into its servers to support AI workloads. The CEO of Super Micro, Charles Liang, and the CEO of Nvidia, Jensen Huang, both of Taiwanese origin, have a deep collaborative relationship.
However, in September, short-selling firm Hindenburg Research released a report accusing Super Micro Computer of accounting issues and questionable business practices, including alleged evasion of sanctions when exporting to Russian and Chinese companies. This report has significantly impacted Super Micro's stock price. Super Micro Computer has refuted the claims, stating that the report contains misleading and inaccurate information, and has promised to clarify and respond to these allegations.
Despite the recent significant stock price decline, Super Micro Computer's current share price is still about 13% higher than it was a year ago.
Key Points:
📉 Super Micro Computer's stock price plummeted 15% due to the resignation of its auditing firm, facing the risk of Nasdaq delisting.
🧐 Ernst & Young resigned due to concerns over corporate governance and financial controls.
🤖 Despite the challenges, Super Micro Computer has benefited from the demand for AI technology, with its stock price up 13% over the past year.
