Super Micro Computer announced on Monday that it has appointed BDO as its new independent auditor, a move that has sparked a significant rally in its stock, which surged 37% in after-hours trading. This announcement comes as the company seeks to address compliance issues with Nasdaq and ensure its continued listing on the exchange.
Key Developments
Super Micro’s shares have experienced a tumultuous journey since peaking in March 2024. The company is currently facing challenges, including a delay in filing its 2024 year-end report with the SEC. Following the resignation of its previous auditor, Ernst & Young, in October, Super Micro has been actively searching for a new accounting firm. Ernst & Young had only recently replaced Deloitte & Touche in March 2023.
In a statement, CEO Charles Liang emphasized the importance of this transition, stating, “This is an important next step to bring our financial statements current, an effort we are pursuing with both diligence and urgency.”
Compliance and Nasdaq Review
Super Micro has informed Nasdaq that it expects to file its annual report for the fiscal year ending June 30, along with its quarterly report for the period ending September 30. The company will remain listed on the Nasdaq while the exchange reviews its compliance plan.
Stock Performance and Market Context
Despite its recent challenges, Super Micro’s stock has seen significant volatility. After soaring over twentyfold from early 2022 to its peak of approximately $70 billion in market capitalization, the stock has faced sharp declines, particularly following revelations of compliance issues. As of the close on Monday, the company’s market cap stood at $12.6 billion, having gained 16% during regular trading hours.
Super Micro has been a key player in the artificial intelligence sector, benefiting from its partnership with Nvidia. The company reported over $15 billion in sales last fiscal year, more than doubling its revenue. On Monday, Super Micro announced the launch of products featuring Nvidia’s next-generation AI chip, Blackwell, positioning itself competitively against firms like Dell and Hewlett Packard Enterprise.
Background of Challenges
Super Micro’s troubles began in August when it announced it would not file its annual report on time. This was compounded by a report from short seller Hindenburg Research, which alleged accounting manipulation and noted that the Department of Justice was investigating the company. Following these developments, Nasdaq notified Super Micro of its non-compliance with listing rules due to the filing delay, giving the company a 60-day window to address the issue.
Conclusion
The appointment of BDO as its new auditor marks a critical step for Super Micro as it aims to rectify its compliance issues and stabilize its stock performance. The significant rise in its share price following this announcement reflects investor optimism about the company’s future, particularly given its strong position in the AI market. As Super Micro navigates this challenging period, its ability to regain compliance with Nasdaq will be crucial for its continued success.
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