Super Micro's $50B stock collapse underscores risk of AI hype
Super Micro Computer Inc. has lost two-thirds of its stock value since March 2023, facing delisting risks after its auditor resigned, amid concerns over financial disclosures and potential accounting manipulation.
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Super Micro Computer Inc. has experienced a dramatic decline in its stock value, losing approximately two-thirds of its worth since being added to the S&P 500 in March 2023. The company's stock fell 33% following the resignation of its auditor, Ernst & Young, which cited concerns about the financial statements prepared by management. This resignation poses a significant risk of delisting from the Nasdaq, with a compliance deadline set for November 16. Super Micro's stock had previously surged over 2,000% in two years, largely due to the AI boom, but has since plummeted to a market cap of under $20 billion. Analysts have expressed concerns about the company's ability to regain compliance and the implications of a Department of Justice investigation into potential accounting manipulation. The company has not filed official financial disclosures since May, and its stock has faced multiple significant drops since the S&P index changes were announced. Super Micro's spokesperson stated that they disagree with Ernst & Young's decision and are actively seeking new auditors. The situation highlights the volatility and risks associated with the AI hype, as well as the challenges faced by companies in maintaining compliance with financial regulations.
- Super Micro's stock has lost about two-thirds of its value since March 2023.
- The resignation of Ernst & Young as auditor raises delisting risks from Nasdaq.
- The company has not filed financial disclosures since May 2023.
- Analysts warn of potential accounting manipulation and ongoing DOJ investigations.
- The situation reflects broader concerns about the sustainability of AI-related stock valuations.
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3 commentsI had some investment in SMCI, but back in March my financial advisor, who usually wants to talk about all trades beforehand, called me to tell me he sold my SMCI because of reports of their financial statements being "fishy". "Usually, things like this signal the death of a company, because investors invest based on trust, and if you start lying to them they stop investing."
At the time I couldn't fathom a landscape without SMCI, over the decades I've bought hundreds of their servers and various other gear. At one point I had the better part of an aisle in a data center that was exclusively SMCI.
Yes, AI may have led to their fast rise in stock, but I don't see that it has anything to do with the fall.
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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.
Hindenburg Research goes after Super Micro
Super Micro Computer Inc. faces allegations of accounting manipulation, self-dealing, and export violations, alongside losing major clients due to reliability issues, raising concerns about governance and compliance.
Super Micro Computer plummets as auditor resigns
Super Micro Computer's stock dropped nearly 30% in premarket trading after auditor Ernst & Young LLP resigned, raising concerns about financial oversight and significantly impacting investor confidence.
Sketchy financials send Supermicro auditors running for the hills
Supermicro's stock fell over 30% after EY resigned as auditor due to financial reporting concerns. The company faces a whistleblower lawsuit, a Justice Department investigation, and risks Nasdaq delisting.