Shares of Super Micro Computer (NASDAQ: SMCI) were surging today as investors awaited a plan from the corporate to remain in compliance with the Nasdaq and maintain its listing.
Following a delay in its 10-K filing, the Nasdaq told Supermicro in September that it was out of compliance with its standards and that it had two months to file the annual report or submit a plan to get back in compliance.
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That deadline is expiring today, but investors were optimistic that it could submit a plan after Barron’s reported on Friday that it was on target to accomplish that. As of two:13 p.m. ET, the stock was up 23.4% on the news, though it had not yet submitted a plan.
At this point, today’s jump is only one small chapter within the larger drama around Supermicro, because the stock continues to be 60% from its peak before Hindenburg Research released a brief report on the corporate, accusing it of accounting problems, which preceded its delay in filing its 10-K report.
In that context, it’s hard to see today’s gains as an actual positive development for the corporate, at the least until we see what the compliance plan includes.
In its preliminary third-quarter earnings report, the corporate also its special committee would release a report on remedial measures to enhance its internal governance, by the top of last week, which it has not yet done.
No matter what’s within the compliance plan, Supermicro still has a whole lot of work to do, because it must find an auditor, in addition to file its 10-K and now its 10-Q for the primary quarter, which it just said could be late.
The stock could get better, but investors shouldn’t mistake the stock’s rebound today and Friday for a meaningful turning point on this saga. Nothing’s modified yet with the corporate’s underlying financial reporting challenges. Until it does, the stock is best avoided.
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