Super Micro shares tumble on governance uncertainty
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The news: Super Micro Computer's shares fell over 27%, reaching an 18-month low after it said a special investigation into the concerns that triggered the exit of its former auditor, Ernst & Young, found no evidence of fraud, but was unsure when it would file its annual report with regulators.
The context: EY resigned last week, citing “integrity” concerns that made them unable to rely on company representations.
That followed Super Micro's delay in filing its annual report to assess internal controls and a short-seller report by Hindenburg Research alleging accounting manipulation.
On Tuesday, the company said a special committee's review found no fraud or misconduct but recommended governance improvements.
The company said it is yet to hire a new auditor and it doesn’t have a timeline for its annual report.
The numbers: Preliminary results for the September quarter released on Tuesday also fell below expectations, with projected December quarter revenue missing analyst forecasts.
Shares, which had surged over 1,000% until March 2023 on AI server demand, fell as much as 27.07% to USD20.20 each on Wednesday in New York (Thursday morning AEDT). The stock is down 26% this year.
What they said: "The actions of the prior auditor and the Special Committee are at odds to each other further increasing confusion around the current developments rather helping in regards to more transparency," JPMorgan analysts said in a note.
The sources: Super Micro Computer statement , Reuters
