Super Micro Computer (SMCI) stock jumped over 30% on Monday, as the company announced that an independent review found no evidence of fraud or misconduct. The server maker, which partners with Nvidia (NVDA) for AI-enabled high-tech servers, made the announcement amid ongoing efforts to regain compliance with Nasdaq listing requirements.
Investigation Details
The investigation, which lasted over three months, included 68 interviews with current and former employees, management, board members, and advisers.
In its filing to the SEC, Super Micro stated:
“The evidence reviewed by the Special Committee does not give rise to any substantial concerns about the integrity of the Company’s senior management or Audit Committee, or their commitment to ensuring that the Company’s financial statements are materially accurate.”
CFO Transition on the Horizon
The company also announced plans to appoint a new chief financial officer (CFO) based on recommendations from the special committee. Current CFO David Weigand will remain in his position until a successor is named.
Background: Hindenburg Report and EY Resignation
The independent review followed an August report from Hindenburg Research, which alleged “accounting manipulation” at Super Micro. The report led to delayed financial filings and the October resignation of Ernst & Young (EY), the company’s previous auditor. EY cited concerns about being associated with financial statements prepared by Super Micro’s management.
Monday’s filing countered EY’s claims, stating:
“The special committee does not believe that EY’s conclusions are supported by the facts uncovered by the Special Committee or the findings set forth in the Special Committee’s report.”
Last month, Super Micro hired BDO as its new auditor and submitted a compliance plan to the SEC to avoid delisting from the Nasdaq.
Stock Performance
Shares of Super Micro have experienced a dramatic rebound, gaining over 100% since reaching a 52-week low on Nov. 15. The stock is now up approximately 39% year-to-date, reflecting renewed investor confidence following the independent review.
JPMorgan’s Cautious Outlook
Despite the positive developments, JPMorgan (JPM) analysts maintained an Underweight rating on Super Micro stock. They cited the need for further clarity regarding compliance and regulatory outcomes, stating:
“The next key watch points for investors to monitor include:
- Whether the new independent auditors, BDO, accept the findings of the Special Committee or decide to undertake their own independent review; and
- Whether Nasdaq supports Super Micro’s request for an extension of time to regain compliance with the Nasdaq continued listing requirements.”
Looking Ahead
Super Micro’s focus remains on stabilizing its position, securing Nasdaq compliance, and regaining investor trust. As it works to solidify these objectives, its partnership with Nvidia and ongoing AI-related projects continue to provide a strong foundation for future growth.
