5 days Ago
In this article SMCI Follow your favorite stocks CREATE FREE ACCOUNT Charles Liang, chief executive officer of Super Micro Computer Inc., during the Computex conference in Taipei, Taiwan, on Wednesday, June 5, 2024. The trade show runs through June 7.
Annabelle Chih | Bloomberg | Getty Images Embattled server maker Super Micro Computer said on Monday that it's hired BDO as its new auditor and submitted a plan to Nasdaq detailing its efforts to regain compliance with the exchange. The shares jumped 23% in extended trading. "This is an important next step to bring our financial statements current, an effort we are pursuing with both diligence and urgency," Super Micro CEO Charles Liang said in a statement .
Super Micro is late in filing its 2024 year-end report with the SEC, and said earlier this month that it was looking for a new accountant after its previous auditor, Ernst & Young, stepped down in October. Ernst & Young was new to the job, having just replaced Deloitte & Touche as Super Micro's accounting firm in March 2023. Super Micro said it told Nasdaq that it believes it will be able to file its annual report for the year ended June 30, and quarterly report for the period ended Sept.
30. The company said it will remain listed on the Nasdaq pending the exchange's "review of the compliance plan." Shares of Super Micro soared more than twentyfold over a two year period from early 2022 until their peak in March of this year.
But the stock has been hammered on troubling news about its compliance with Nasdaq. Once valued at about $70 billion, the company's market cap was at $12.6 billion at the close on Monday, following a 16% rally during regular trading.
Super Micro has been one of the primary beneficiaries of the artificial intelligence boom, due to its relationship with Nvidia . Sales last fiscal year more than doubled to $15 billion. On Monday, Super Micro announced that it was selling products featuring Nvidia's next-generation AI chip called Blackwell.
The company competes with vendors like Dell and Hewlett Packard Enterprise in packaging up Nvidia AI chips for other companies to access. Super Micro was added to the S&P 500 in March, reflecting its rapidly growing business and then-soaring stock price. Less than two weeks after the index changes were announced, Super Micro reached its closing high of $118.
81. The troubles began within months. In August, Super Micro said it wouldn't file its annual report with the SEC on time.
Noted short seller Hindenburg Research then disclosed a short position in the company, and said in a report that it identified "fresh evidence of accounting manipulation." The Wall Street Journal later reported that the Department of Justice was at the early stages of a probe into the company. The month after announcing its report delay, Super Micro said it had received a notification from the Nasdaq, indicating that the delay in the filing of its annual report meant the company wasn't in compliance with the exchange's listing rules.
Super Micro said the Nasdaq's rules allowed the company 60 days to file its report or submit a plan to regain compliance. Based on that timeframe, the deadline was Monday. WATCH: Super Micro is a sell due to accounting irregularities watch now VIDEO 4:22 04:22 Lightning Round: Super Micro is still a sell due to accounting irregularities Mad Money with Jim Cramer.
