Super Micro Computer (SMCI) stock plunged as much as 18% early Wednesday after the corporate said it could delay the filing of its annual report for its fiscal 12 months that ended June 30.
The announcement comes a day after short-seller Hindenburg Research claimed, amongst other things, “accounting manipulation” on the AI high flyer.
“SMCI is unable to file its Annual Report throughout the prescribed time period without unreasonable effort or expense,” the corporate said in an announcement. “Additional time is required for SMCI’s management to finish its assessment of the design and operating effectiveness of its internal controls over financial reporting as of June 30, 2024.”
Super Micro shares soared from $290 in early January to about $1200 by March. The stock was added to the S&P 500 in March.
Super Micro stock is now off greater than 60% from its March peak, but remains to be up 50% 12 months thus far. The corporate recently announced a 10-for-1 stock split effective Oct. 1.
The stock fell about 2% on Tuesday after Hindenburg said its three-month investigation “found glaring accounting red flags, evidence of undisclosed related party transactions, sanctions and export control failures, and customer issues.” The firm also disclosed it had taken a brief position in Super Micro.
The maker of information center servers and management software captured the eye of investors this 12 months because it rode the AI wave. The corporate buys components from AI chipmaker Nvidia (NVDA).
In its report, Hindenburg claimed that despite a $17.5 million settlement in August 2020 with the SEC following an inquiry for “widespread accounting violations,” Super Micro’s business practices didn’t improve and senior executives who had left amid the scandal were later rehired.”
The report quoted a former salesperson: “Just about all of them are back. Almost the entire people who were let go that were the reason for this malfeasance.”
“Even after the SEC settlement, pressure to satisfy quotas pushed salespeople to stuff the channel with distributors using ‘partial shipments’ or by shipping defective products around quarter-end, per our interviews with former employees and customers,” Hindenburg said in its report.
“All told, we consider Super Micro is a serial recidivist.”
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.
Click here for in-depth evaluation of the newest stock market news and events moving stock prices
Read the newest financial and business news from Yahoo Finance