A day after a major short seller accused the company of alleged accounting irregularities, Super microcomputer (SMCI) has announced that it is delaying the filing of its annual report on Form 10-K with the US Securities and Exchange Commission. SMCI shares fell sharply following this news.
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The data center specialist said it needed more time “to complete an evaluation of the design and operating effectiveness of its internal controls over financial reporting” for the fiscal year ended June 30.
In a news release, Super Micro said it plans to file a late filing notification on Form 12b-25 regarding its annual report on Friday.
Super Micro did not say how long it would take to complete its 10-K report and filing.
SMCI stock fell on the news
SMCI shares fell more than 23% to 416.60 in morning trading on the stock market today.
Shares of the once high-flying computer hardware vendor hit a record high of 1,229 on March 8. Super Micro shares had surged due to investor enthusiasm for building data centres to support artificial intelligence applications.
SMCI shares closed down 2.6% at 547.64 on Tuesday. Earlier in the day, short seller Hindenburg Research accused Super Micro of accounting fraud, export control failures, customer issues and other problems.
In a client note, JPMorgan analyst Samik Chatterjee said Hindenburg's report “did not provide detailed information about the company's alleged misdeeds.”
Chatterjee reiterated his overweight, or buy, rating on SMCI stock with a price target of $950.
“It is not surprising that the company has areas for improvement to further improve governance, transparency and communication with investors, which would be more appropriate for a company of this size, as its growth has recently accelerated along with demand for AI servers,” he added. “However, in our view, the lack of this does not immediately indicate wrongdoing by the company.”
SMCI's troubles could benefit rivals
Dell Technologies “(Dell) could benefit from Super Micro's problems,” Evercore ISI analyst Amit Daryanani said in a client note titled “SMCI pain = Dell gain?”
He said Dell is poised to gain market share in AI servers as Super Micro deals with its negative publicity.
SMCI stock is on the IBD Tech Leaders list. But its IBD Composite Rating is 76 out of 99, according to IBD Stock Checkup.
Follow Patrick Seitz on X (formerly Twitter) @IBD_PSeitz For more stories on consumer technology, software and semiconductor stocks.
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