Super Micro shares plummet after Q4 update raises concerns

Super Micro shares plunged 22% on Wednesday to their lowest level since May of last year after the embattled server maker issued disappointing unaudited financials and failed to provide specifics plans to keep its Nasdaq listing.

The stock dropped to $21.55 as of early afternoon and is now down 82% from its high in March, a selloff that’s wiped out about $57 billion of market cap.

Super Micro had its worst week on the market on record last week after the resignation of its auditor, Ernst & Young, the second accounting firm to bow out in under two years. The company faces accusations from an activist of accounting irregularities and that it’s shipped sensitive chips to sanctioned nations and companies, violating export controls.

Super Micro hasn’t filed audited financials since May and is at risk of being delisted by Nasdaq if it doesn’t report results for the latest fiscal year to the SEC by mid-November. The company said late Tuesday, in reporting preliminary results for the first fiscal quarter, that it doesn’t know when it will file annual financials.

On a call with analysts, the company said it wouldn’t discuss any questions related to Ernst & Young’s decision to resign and didn’t address corporate governance issues. CEO Charles Liang said Super Micro was actively in the process of hiring a new auditor.

Analysts at Mizuho suspended coverage of the stock on Wednesday “due to a lack of full financial detailed and audited statements.” Wedbush analysts, who have the equivalent of a hold rating on the stock, said the report left “more questions than answers.”

“Management seems fully focused on finding an auditor and resolving its late filing status,” the Wedbush analysts wrote. “However, we don’t know how significant the hurdles might be in achieving this goal.”

Liang said on the call that the company is “working with urgency to become current again with our financial reporting.”

For the quarter ending Sept. 30, Super Micro said it generated net sales of between $5.9 billion and $6 billion. That’s under analyst expectations of $6.45 billion, but is still up 181% on an annual basis. The company’s business has been booming of late because it ships servers packed with Nvidia’s processors for artificial intelligence.

Super Micro shares soared 246% last year after jumping 87% in 2023. The stock peaked at $118.81 in March, shortly after being added to the S&P 500.

Liang said demand is strong for the latest Nvidia GPU, called Blackwell, which started shipping in recent weeks.

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