Super Micro Computer (NASDAQ: SMCI) stock has been in free fall for the last six months. A myriad of issues related to its accounting practices have spooked investors. After the corporate announced it could must delay the discharge of its 10-K annual report for its fiscal 2024 ended June 30, it also faced the potential for its stock being delisted from the Nasdaq Stock Exchange.
It has now hit the deadline for a Nasdaq delisting, but today it’s planning a filing that might lead to the corporate avoiding being delisted, reports Barron’s. That has led to a spike in shares today, to the tune of 17.5% as of 12:30 p.m. ET. Though the stock continues to be lower by about 75% within the last six months.
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If the corporate does indeed manage to avoid being delisted from the key exchange, it’s definitely excellent news for shareholders. So it is sensible that investors sent shares soaring today. But that won’t the tip of the corporate’s problems.
The ten-K filing delay followed a short-seller report questioning Supermicro’s accounting practices. Since then the corporate’s auditor resigned, and it said it should even be forced to delay its fiscal 2025 first-quarter report while trying to find a latest auditing firm.
Supermicro management did release an update on Nov. 5 saying preliminary results for its September quarter could be below expectations. But it surely also added that a three-month independent counsel investigation found “no evidence of fraud or misconduct on the a part of management or the board of directors.”
But investors must be concerned concerning the business ramifications as well. Supermicro might be losing orders because it struggles to right its ship. And today’s bounce is probably going from a brief squeeze as short sellers cover positions and take profits. Short sellers held about 19% of the stock float as of the tip of October, in response to MarketWatch.
Those fascinated with owning the stock should probably wait for higher official news. Today’s bounce is not an indication that the business itself is back in growth mode.
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