- Super Micro Computer’s (SMCI) shares dropped 8.33% to $47.29, hitting an intraday low of $44.72 on Tuesday, as the company scrambles to file overdue financial reports by today, February 25, to avoid Nasdaq (^IXIC) delisting, following its February 11 preliminary Q2 fiscal 2025 update.
- The firm’s troubles intensified in August 2024 when Hindenburg Research alleged accounting irregularities, triggering a DOJ probe, compounded by a missed annual report deadline and Ernst & Young’s October resignation over governance concerns.
- Once a $72 billion AI hardware standout, Super Micro’s credibility is under siege, with its past SEC issues and current legal scrutiny fueling investor unease as it battles to stabilize operations and retain market trust.
Super Micro Computer’s (SMCI) stock slid 8.33% in midday trading Tuesday, shedding $4.30 to $47.29, after dipping to an intraday low of $44.72. The embattled server maker is racing against a looming Nasdaq (^IXIC) delisting deadline tied to its overdue financial filings.. The company, once a darling of the AI hardware boom, finds itself mired in uncertainty, with its February 11 announcement of preliminary Q2 fiscal 2025 results – covering the period ending December 31, 2024 – offering little reassurance to investors. Super Micro insists it’s pushing hard to submit its Annual Report on Form 10-K for the fiscal year ended June 30, 2024, and its Quarterly Report on Form 10-Q for the period ended September 30, 2024, projecting compliance by today, February 25. However, the clock is ticking, and skepticism abounds given its rocky recent history.
The turbulence rocking Super Micro kicked into high gear last August when Hindenburg Research dropped a bombshell report, accusing the firm of accounting irregularities, undisclosed related-party dealings, and sanctions evasion—a salvo that sparked a U.S. Department of Justice investigation and sent shockwaves through its investor base. That same month, the company missed its deadline to file its annual financial report, a stumble that only deepened doubts about its governance. The pressure escalated in October when Ernst & Young LLP, its auditor, walked away, citing serious concerns over transparency and board independence—issues that echoed Hindenburg’s claims and cratered the stock further, slashing its value from a March 2024 peak of $72 billion/$122.90 p/sh to $30 billion today. The DOJ probe, still in its early stages, looms as a potential legal and financial overhang, compounding the fallout from a short-seller attack that Super Micro has struggled to convincingly rebut.
Despite the chaos, Super Micro’s preliminary Q2 update hints at a business still churning out revenue – exact figures remain under wraps until filings materialize—but the lack of audited numbers keeps the market on edge. The company’s past brushes with regulatory scrutiny, including a 2020 SEC settlement over improper revenue recognition and a temporary Nasdaq delisting in 2018, cast a long shadow, raising questions about whether old habits persist. Investors, once buoyed by Super Micro’s role in supplying Nvidia-powered AI clusters, now face a stark reality: a firm fighting to restore credibility amid a perfect storm of legal, operational, and reputational challenges, with its Nasdaq listing – and perhaps its broader future – hanging in the balance.
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