Super Micro Computer (NASDAQ: SMCI) stock is getting crushed Wednesday. The corporate’s share price was down 26.3% as of 11:30 a.m. ET, in line with data from S&P Global Market Intelligence.
Hindenburg Research published a brief report on Supermicro yesterday, alleging that the corporate was a serial offender when it got here to bad accounting practices. Unfortunately, the server-hardware specialist seems to have almost immediately lent credence to a few of the criticisms within the bearish report. In a press release published this morning, the corporate announced that it might be delaying the filing of its annual 10-K report with the Securities and Exchange Commission (SEC) for the fiscal 12 months ended June 30.
News that the financial filing is being postponed in order that Supermicro can “complete its assessment of the design and operating effectiveness of its internal controls over financial reporting” is spurring big sell-offs for the stock today. But even with today’s pullback, the factitious intelligence (AI) stock remains to be up 41% 12 months so far — and it’s heading for a stock split on Oct. 1.
Is it time to purchase Supermicro stock?
Supermicro stock was already a high-risk, high-reward investment play. With the news the corporate might be delaying its 10-K report, the outlook has turn into much more speculative. Along with news that Supermicro’s annual filing with the SEC might be delayed, the discharge of Nvidia‘s much-anticipated second-quarter results later today could possibly be one other major source of volatility.
With a lot uncertainty on the horizon, it is not surprising that investors are feeling skittish about Supermicro stock. But today’s pullback could possibly be a worthwhile buying opportunity for risk-tolerant investors.
Within the press release, Supermicro said that it had not made changes to the quarterly and full-year results that it published on Aug. 6. It’s still possible that the corporate will wind up making performance revisions, however the market could also be overreacting as a result of news of the delayed filing coming so soon after Hindenburg published its critical report. With signs that demand for AI-tailored servers and other hardware stays very strong, treating today’s big pullback as a pre-stock-split buying opportunity could possibly be a very good move for risk-tolerant investors.
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Keith Noonan has no position in any of the stocks mentioned. The Motley Idiot has positions in and recommends Nvidia. The Motley Idiot has a disclosure policy.
Super Micro Computer Stock Is Plummeting Today — Is This a Buying Opportunity Ahead of Its Stock Split? was originally published by The Motley Idiot