Super Micro Computer (SMCI) saw its stock plummet by over 9% on Wednesday, continuing the slide from the previous day, despite efforts by CEO Charles Liang to calm investor fears about a potential delisting from the Nasdaq. At the Reuters Next conference, Liang expressed confidence that the company would meet Nasdaq’s deadline for submitting its delayed financial reports to the U.S. Securities and Exchange Commission, emphasizing Super Micro’s commitment to transparency and regulatory compliance.
The stock’s performance, as noted by YF, had been under strain since the beginning of the week, following JPMorgan (JPM) analyst Samik Chatterjee’s decision to maintain an “Underweight” rating on SMCI. However, Chatterjee provided some positive notes from his recent interactions with Super Micro’s leadership, notably dispelling concerns about the cessation of operations in Malaysia. He reported that the expansion in Malaysia could positively impact gross margins and confirmed that the company’s customer base remains robust, showing no signs of shifting orders to competitors as speculated.
Super Micro has been navigating through turbulent waters since an August report by Hindenburg Research, which leveled serious allegations against the company including accounting malpractices and export control violations. This led to delays in its financial reporting, raising delisting risks from the Nasdaq. The situation was further complicated by the resignation of its long-standing auditor, Ernst & Young, in late October, due to issues with the company’s financial statements, and a subsequent earnings report in November that fell short of expectations.
However, a ray of hope emerged when Super Micro submitted a compliance plan to Nasdaq, triggering a significant rally in its stock price. The company’s shares surged nearly 30% after an independent review cleared it of any fraud or misconduct. Moreover, Nasdaq granted Super Micro an extension, setting a new deadline of February 25 for the filings.
Despite these developments, the stock has faced a lack of analyst support, with several major firms like Wells Fargo (WFC), Barclays (BCS), and KeyBanc suspending their coverage. Currently, only three out of the analysts tracked by Bloomberg recommend buying the stock, indicating a cautious approach from the investment community towards SMCI amidst its ongoing challenges.
Price Action: SMCI is currently trading at $38.13, down $2.41, or 5.94%, intraday. Over the past five trading days, the $23.74 billion market cap company has suffered a nearly 10% loss in value.
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