Shares of Super Micro Computer (SMCI) soared by 28% on Monday, following the company’s announcement that an independent review unearthed no wrongdoing in its operations. Known for partnering with Nvidia (NVDA) to deliver advanced servers fueled by AI chips, Super Micro also revealed plans to hunt for a new chief financial officer based on the advice from the special committee that conducted the review. For now, David Weigand remains in the role until someone new steps in.
The extensive review spanned over three months and involved interviews with 68 witnesses, including employees, former and current management, advisers, and board members. Super Micro emphasized in its SEC filing that the findings do not raise any significant concerns about the integrity of its senior management or its Audit Committee, nor about their dedication to ensuring the financial statements’ accuracy.
This development comes in the wake of a tumultuous period for the company’s stock, which experienced volatility after a report in August by Hindenburg Research accused Super Micro of “accounting manipulation” among other issues. In response to the turmoil, Super Micro postponed its annual report release, and by October, its accounting partner Ernst & Young opted out, citing they didn’t want to be tied to the statements prepared by Super Micro’s management.
The filing on Monday pointed out that the special committee doesn’t align with Ernst & Young’s earlier conclusions, asserting that they are not backed by the facts the committee uncovered in its investigation.
In recent steps to stabilize, the company recruited BDO as its new auditor and laid out a compliance plan to the SEC, striving to prevent a Nasdaq delisting scenario. The stock has seen a robust rebound, surging over 100% since hitting its lowest point in the past year on November 15, and showing a 39% increase year-to-date.
Nevertheless, analysts at JPMorgan (JPM) have decided to maintain an Underweight rating on Super Micro’s stock until the firm demonstrates clearer compliance. They noted key aspects investors should observe next: whether Super Micro’s newly appointed auditors, BDO, will accept the special committee’s findings or choose to conduct their own review, and whether Nasdaq will grant Super Micro more time to align with its listing requirements.
