Super Micro Computer (SMCI), the server manufacturer that has been grappling with financial reporting issues, announced on Monday the appointment of BDO as its new auditor. This move comes alongside the submission of a compliance plan to Nasdaq (NDAQ), aiming to address the company’s delayed filings with the Securities and Exchange Commission (SEC).
In extended trading, Super Micro’s shares surged by almost 40% to $29.86, reflecting investor optimism about the company’s efforts to resolve its compliance issues. CEO Charles Liang emphasized the urgency and diligence with which the company is addressing these issues, stating, “This is an important next step to bring our financial statements current.”
The company failed to meet the deadline for filing its fiscal year 2024 annual report, which was supposed to be submitted by the end of September. This delay followed the resignation of its former auditor, Ernst & Young, in October. Ernst & Young had only recently taken over from Deloitte & Touche in March 2023, highlighting the swift changes in Super Micro’s auditing landscape.
Super Micro informed Nasdaq that it anticipates being able to file both its annual report for the year ended June 30, 2024, and its quarterly report for the period ended September 30, 2024, in the near future. The company’s securities will continue to trade on the Nasdaq while the exchange reviews the submitted compliance plan.
The stock of Super Micro has experienced significant volatility, having catapulted 1400% from early January 2023 to its $122.90 peak in March of the current year. However, it has since faced a steep decline due to concerns over its compliance with Nasdaq listing standards. After today’s rally, the company’s market capitalization stands at approximately $11 billion, a sharp drop from its valuation of about $70 billion at its peak.
Super Micro has been at the forefront of the artificial intelligence (AI) hardware sector, significantly benefiting from its close ties with Nvidia (NVDA). Last fiscal year, the company’s sales skyrocketed to $14.9 billion, an impressive 110% increase year-over-year from the previous fiscal year’s sales of $7.12 billion. On the same day as the auditor announcement, Super Micro revealed it would begin selling products equipped with Nvidia’s latest AI chip, the Blackwell, positioning itself as a competitor to firms like Dell (DELL) and Hewlett Packard Enterprise (HPE) in the AI hardware market.
The company’s proactive steps towards regaining compliance, coupled with its strategic focus on high-growth areas like AI, present a mixed picture of recovery and continued innovation amidst financial scrutiny. The market’s reaction in after-hours trading suggests that investors are betting on Super Micro’s ability to navigate through its current challenges while maintaining its pivotal role in the tech ecosystem.
Leave a Reply