Shares of Super Microcomputer (SMCI) rose more than 30% on Tuesday after the artificial intelligence server maker filed a compliance plan with the SEC a day earlier to avoid delisting from the Nasdaq.
The company has partnered with Nvidia (NVDA) to provide high-tech servers powered by its AI chips, and recently signed a major contract to supply those servers to Elon Musk’s xAI, but the company’s compliance plans remain unclear. He said this indicates that the delayed submission of documents is progressing smoothly. The SEC will “update periodic reports within such discretionary period as Nasdaq staff may allow.”
Investors filed after Barron’s reported after Friday’s bell that Supermicro would submit a plan to block the delisting by a Monday deadline in accordance with Nasdaq rules, people familiar with the matter said. I was looking forward to it. The stock rose about 16% during regular trading Monday.
The server maker announced Monday that it has hired a new auditor, BDO, after its previous accountant, EY, resigned at the end of October.
Even including this week’s spike, the stock has fallen about 56% in the past three months. SMCI stock rose as much as 300% earlier this year, but is down more than 20% in 2024.
Supermicro is grappling with the fallout from a report released in August by short seller Hindenburg Research. The report revealed allegations of accounting fraud, export control violations, and questionable relationships between executives and Supermicro’s partners.
In response to the Hindenburg report, the company postponed its annual 10-K filing with the Securities and Exchange Commission. And last week, Supermicro also delayed filing its latest quarterly 10th quarter report with the SEC. Adding to the company’s woes, the company is reportedly under investigation by the Department of Justice. Stock prices plummeted due to the rapid succession of bad news. In particular, EY’s resignation caused supermicro stocks to drop more than 30% in a single day in late October.
After Supermicro’s fiscal first quarter earnings report on Nov. 5 missed Wall Street’s expectations, the company’s stock price plummeted, dropping 18% the day after the earnings release.
Supermicro rose to prominence over the past year as the generative artificial intelligence boom boosted sales of the company’s AI servers and other AI-related technologies. In fiscal 2024, Super Micro’s adjusted earnings rose nearly 90% to $2.21 per share, and sales rose 110% to $15 billion.
Analysts expect the company’s profits to rise more than 40% in fiscal 2025, with sales surging more than 70%.
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