Super Micro, a leading hardware provider for Nvidia and other top AI players, is super flopping: The company’s stock buckled this week after announcing that auditor Ernst & Young resigned mid-job, worsening concerns about the accuracy of Super Micro’s finances.
Past its peak? For a time, Super Micro rode the generative AI boom even harder than Nvidia. It spiked 2,000% in the two years leading up to March, when it made it to the S&P 500. Since then, its market cap has collapsed from a high of nearly $70 billion to below $20 billion—with about $10 billion of that loss happening this week after EY’s resignation.
Charting the decline: Notorious short-seller Hindenburg Research alleged “accounting manipulation” at Super Micro in August, and the Wall Street Journal revealed a Justice Department probe into Super Micro in September.
Roasted: This week, EY questioned Super Micro’s “integrity and ethical values,” according to an SEC filing. The firm said it couldn’t trust the company’s self-reporting and wasn’t willing to associate with Super Micro’s financial statements. Super Micro knocked the decision and said addressing EY’s concerns wouldn’t change any previously reported earnings.
Looking ahead…the tech company has to file its overdue annual report by Nov. 16 or possibly get booted from the Nasdaq.—ML
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{Categories} _Category: Implications{/Categories}
{URL}https://www.morningbrew.com/daily/stories/2024/11/01/ai-darling-at-risk-of-being-delisted{/URL}
{Author}Molly Liebergall{/Author}
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{Keywords}Morning Brew,AI{/Keywords}
{Source}Implications{/Source}
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