Super Micro: Fresh Evidence of Accounting Manipulation, etc.
Super Micro Computer Inc. faces allegations of accounting manipulation, self-dealing, and sanctions evasion, with significant irregularities and client losses threatening its market position amid increasing competition.
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Super Micro Computer Inc., a $35 billion server manufacturer, is facing serious allegations of accounting manipulation, self-dealing, and sanctions evasion, according to a report by Hindenburg Research. The investigation revealed significant accounting irregularities, including undisclosed related party transactions and failures in export controls. Super Micro previously faced SEC charges for accounting violations, leading to a $17.5 million settlement. Despite this, the company reportedly resumed improper revenue recognition shortly after the settlement. The report highlights concerning relationships with related parties, particularly those controlled by CEO Charles Liang's brothers, which have raised red flags regarding revenue recognition and accounting practices. Additionally, Super Micro has been implicated in potential violations of U.S. export bans, with a notable increase in exports to Russia since the Ukraine invasion. The company has also faced criticism for its product quality and customer service, leading to significant clients like Tesla and CoreWeave shifting to competitors. The report concludes that Super Micro's ongoing governance issues and product reliability concerns may jeopardize its market position as competition intensifies.
- Super Micro is accused of accounting manipulation and self-dealing involving related parties.
- The company faced SEC charges for accounting violations and resumed improper practices post-settlement.
- Exports to Russia have reportedly increased, raising concerns about compliance with U.S. sanctions.
- Major clients are shifting to competitors due to product quality and service issues.
- The company's governance and compliance issues threaten its competitive standing in the market.
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5 commentsGoing public in the US was absolutely not the correct choice for them. Other than, quite obviously, not being able to keep up with the accounting requirements (which are, like, 80% of the job for any public company, the other 20% being split 80/20 between 'keeping shareholders happy' and 'doing the right thing'), they just lost sight of their core market, which used to be "cutting edge reference design boards for people who know what they're doing."
Instead, we got "packaged solutions" that included overpriced RAM and SSDs/HDDs. Well, sure, if I'd wanted that, I'd rather go to Dell/EMC! Because they at least have the delivery capabilities, which Supermicro has also been under-performing on for the past years.
So, yeah...
Sort of like when a 3rd person shooter has its RNG tweaked. Too much trouble to revise all historic numbers, probably impossible. Current stats no longer compare to previous.
You can revise calculations and bookings in nearly infinite ways but the statements are "standardized." For executives it's money or more favorable numbers just staring you in the face saying "take me."
I know, they get audited, which is the only thing containing the corruption.
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