Super Micro Computer (NASDAQ: SMCI) finds itself in hot water as the accounting debacle continues to escalate. Since the Hindenburg Research report in late August, the company has faced challenges such as a delayed 10-K filing, a Department of Justice investigation, and Ernst & Young’s resignation as its auditor. The stock has plummeted by 65% since the initial report.
Now, investors are anxiously waiting for the next shoe to drop, with two significant events on the horizon. Nasdaq notified Supermicro of non-compliance with timely filing requirements, giving the company until November 16 to submit its 10-K or risk delisting procedures starting on November 18. It remains uncertain how the company plans to address this issue, especially without an auditor.
Despite the turmoil, Supermicro’s Independent Special Committee assures investors of the absence of fraud or misconduct within the management or board. Remedial measures are being recommended, with a full report expected by the end of the week. However, the company’s future remains uncertain, and potential fines or financial restatements could further damage the stock.
A key concern for Super Micro Computer is its partnership with Nvidia (NASDAQ: NVDA), which may be at risk as Nvidia reportedly redirects orders away from Supermicro due to reputational concerns. Nvidia’s upcoming earnings report on November 20 could provide clarity on the situation.
As Supermicro’s problems reach a critical point, the stock faces a pivotal moment. Whether it can stay compliant with Nasdaq, reassure investors, and maintain its partnership with Nvidia remains to be seen. While there is a possibility of recovery, the current risks make the stock a gamble. Monitoring Supermicro’s next steps in the coming weeks will be crucial for investors.
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